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U. S. SUPT. OF DOCUMENTS
:,- ? - 5 ^
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPEE ACTIVITIES IN THE
LABOR OR MANAGEMENT EIELD
EIGHTY-SIXTH CONGKESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 44, 86TH CONGRESS
JULY 6 AND AUGUST 18, 1959
PART 57
Printed for the use of the Select Committee on Improper Activities in the
Labor or Management Field
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT PIELD
EIGHTY-SSttoH CONGRESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 44, 86TH CONGRESS
JULY 6 AND AUGUST 18, 1959
PART 57
Printed for the use of the Select Committee on Improper Activities in the
Labor or Management Field
UNITED STATES
GOVERNMENT PRINTING OFFICE
36751 WASHINGTON : 1959
Boston Public Library
Superintendent of Documents
DEC 14 1959
DEPOSITORY
SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABOR OR
MANAGEMENT FIELD
JOHN L. McCLELLAN, Arkansas, Chairman
KAKL E. MUNDT, South Dakota, Vice Chairman
JOHN F. KENNEDY, Massachusetts BARRY GOLDWATER, Arizona
SAM J. ERVIN, Jr., North Carolina CARL T. CURTIS, Nebraska
FRANK CHURCH, Idaho HOMER E. CAPEHART, Indiana
Robert F. Kennedy, Chief Counsel
Jerome S. Adlerman, Assistant Chief Counsel
Ruth Youno Watt, Chief Ckrk
II
CONTENTS
Testimony of — Page
Alexander, Herbert 19908
Hacker, Andrew 19900
Heard, Alexander 19862
Kaplan, Arthur G 19849
Petro, Sylvester 19884
William E. Bufalino and Teamsters Local 985,
Detroit, Mich.
exhibits
Introduced Appears
on page on page
1. Business card used by Cecil Watts with Teamsters seal- _ 19850 (*)
2A. Application for lease dated November 6, 1947, signed
by William E. Bufalino 19850 (*)
2B. Prospect record related to the above 19850 (*)
2C. Authorization form for door lettering, night passes, and
directory board listings, related to the above, dated
November 6, 1947, signed by William E. Bufalino. __ 19850 (*)
2D. Letterhead of "William E. Bufalino, labor relations con-
sultant" 19850 (*)
3. Calling card of "WiUiam E. Bufalino, executive vice
president, Meli-Dy Enterprises" 19850 (*)
3A. Partnership return of income for the year 1947 of Meli-
Dy Enterprises 19850 (*)
SB. Schedule of loans to Meli-Dy Enterprises made by
Angelo Meli from 1947 through 1955 _'_ 19851 (*)
3C. Balance sheet of Meli-Dy Enterprises, dated December
31, 1946 19851 (*)
3D. Letter dated March 1, 1951, addressed to Vincent A.
Meli from CMAC Corp., and guaranty agreement
referred to therein 19851 (*)
4. Documents relating to the Nickelodeon Record Corp.
of America 19852 (*)
5. Documents relating to the Meli-Dy Realty Co 19853 (*)
6. Transcript of hearing before the Michigan Department
of Revenue, December 4, 1952 19853 (*)
7. List of ofRcials and emplovees of local 985 with criminal
records I _- 19853 (*)
8. Schedule: Local 985, questionable expense items —
flowers, fruit, food, and candy, January 1953 through
June 1957 19854 (*)
9. List of Bufalino associates with criminal records 19855 (*)
10. Letter dated August 14, 1951, addressed to Mr. Jay
Mertz, secretary. State Board of Law Examiners,
Lansing, Mich., from William E. Bufalino, Coin
Machine Workers Union 19855 (*)
• May be found in the files of the select committee.
in
IV CONTENTS
Political Campaign Contributions by Labor and
Management
exhibits
Introduced Appears
on page on page
1. Questionnaire for labor unions, prepared by the Senate Sub-
committee on Privileges and Elections, 1956 19883 (*)
2. Questionnaire for corporations, prepared by the Senate Sub-
committee on Privileges and Elections, 1956 19883 (*)
Proceedings of—
July 6, 1959 19849
August 18, 1959 19857
*May be found In the files of the select committee.
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
MONDAY, JULY 6, 1959
U.S. Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington, D.G.
The select coimnittee met at 4 :40 p.m., pursuant to Senate Resolu-
tion 44, agreed to February 2, 1959, in the caucus room, Senate Office
Building, Senator Carl T. Curtis presiding.
Members of the select committee present : Senator Carl T. Curtis,
Republican, of Nebraska; Senator Homer E. Capehart, Republican, of
Indiana.
Members of the professional staff present : Robert F. Kennedy, chief
counsel ; Paul J. Tiemey, assistant counsel ; Arthur G. Kaplan, assist-
ant counsel ; Ruth Y. Watt, chief clerk.
Mr. Kennedy. I would like to call Mr. Kaplan to put in some rec-
ords, Mr. Chairman, that we weren't able to get in at an earlier hearing,
in connection with Mr. Bufalino.
Senator Curtis. You do solemnly swear that the testimony you shall
give before this Senate select committee will be the truth, the whole
truth, and nothing but the truth, so help you God ?
Mr. Kaplan. I do.
TESTIMONY OF ARTHUR G. KAPLAN
Senator Curtis. State your name.
Mr. Kaplan. Arthur G. Kaplan.
Senator Curtis. Your residence?
Mr. Kaplan. Portland, Oreg.
Senator Curtis. You are an employee of this committee ?
Mr. Kaplan. Yes, sir.
Mr. EJENNEDY. Mr. Kaplan, do we have certain documents in con-
nection with the activities of Mr. Bufalino of local 985 of the Team-
sters that we want to place into the record ?
Mr. ICaplan. Yes, sir ; we do.
Mr. Kennedy. These are documents that have come into our posses-
sion or which were in our possession and which we had not been able to
put into the record in prior hearings ; is that right ?
Mr. Kaplan. Yes, sir.
Mr. Kennedy. We will try to go through this as quickly as possible,
Mr. Chairman, but it is important as far as completing the record and
writing the report is concerned.
19849
19850 IMPROPER ACTIVITIES IN THE LABOR FIELD
You have a business card of Mr. Cecil Watts ?
Mr. Kaplan. Yes, sir. That we thought was significant because it
shows the use of the Teamsters seal, during the course of Mr. Watts'
using this card while he was in the jukebox business.
Mr. Kennedy. Could that be made an exhibit ?
Senator Curtis. It will be marked "Exhibit 1" and received for
reference only.
(The document referred to was marked "Exhibit 1" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Do we find that Mr. Buf alino was in the labor con-
sulting business at the same time he was a Teamster union official?
Mr. Kaplan. Yes, sir; he was. We have the lease arrangements
he made in the same building in which the local which he was then
employed by was also a tenant in. It showed Mr. Buf alino signing
the lease and making application to be a public and private labor
relations consultant and saying that that was his business.
Senator Curtis. It will he marked "Exhibit 2, A, B, and C."
(The documents referred to were marked "Exhibits 2-A, 2-B, and
2-C" for reference and may be found in the files of the select com-
mittee.)
Mr. Kaplan. Also the letterhead that he had printed up, showing
himself distinctive from the union and in this business.
Senator Curtis. That will be 2-D.
(The document referred to was marked "Exhibit No. 2-D" for
reference and may be found in the files of the select committee.)
Mr. Kennedy. Do we find that he is also in the jukebox business
himself ?
Mr. Kaplan. Yes, sir. We have documents which indicate that he
was a partner in a company called Meli-Dy Enterprises. We find
that he reported income from some of that, and we also find his name
on the balance sheets and various documents of that company that we
obtained from their accountant.
Mr. Kennedy. What year was that? Just approximately. 1954?
Mr. Kaplan. No, sir. It started in 1946, and Mr. Bufalino re-
mained in as partner until the middle of 1948.
Mr. Kennedy. What about the Ace Automatic Music Co. ?
Mr. Kaplan. The Ace Automatic Music Co., we have documents
which indicate
Mr. Kennedy. Could we have those others made exhibits, for Meli-
Dy Enterprises?
Mr. Kaplan. We have a copy of a calling card of Mr. Bufalino,
which states that he is an executive vice president of this company.
Senator Curtis. It will be marked "Exhibit 3" and received for
reference only.
(The document referred to was marked "Exhibit No. 3" for ref-
erence and may be found in the files of the select committee.)
Mr. Kaplan. We have a copy of the partnership return of the
company, in which Mr. Bufalino is mentioned.
Senator Curtis. In relation to the same company ?
Mr. Kaplan. In relation to the same company, sir.
Senator Curtis. Number it 3-A. It will be received for reference
only.
(The documents referred to were marked "Exhibits 3-A, and 3-B"
for reference and may be found in the files of the select committee.)
IMPROPER ACTIVITIES IN THE LABOR FIELD 19851
Mr. Kaplan. We also have a schedule of all the loans of this com-
pany that were made to it by Angelo Meli, with several others, right
up through the years of 11)47 through 1955, indicating, again, the
backing of JNIr. Meli for Mr. Bufalino and his brother-in-law, Vin-
cent Meli.
Senator Curtis. That will be exhibit 3-B.
(The document referred to was marked "Exhibit 3-B" for refer-
ence and may be found in the files of the select committee.)
Mr. Kaplan. We have the balance sheet of the company showing
the investments of Mr. Bufalino and Mr. Meli.
Senator Curtis. That will be marked 3-C and received for refer-
ence.
(The document referred to was marked "Exhibit 3-C" for refer-
ence and may be fomid in the files of the select committee.)
Mr. Kennedy. What about the Ace Automatic Music Co. Did you
get that?
Mr. Kaplan. Yes, sir. May I just put in one more thing on the
other company? That was that Mr. Angelo Meli guaranteed an
indebtedness of Mr. Bufalino. Mr. Meli, as late as 1950, had almost
$48,000 which he subsequently paid off during the ensuing year, go-
ing again to the continued interest in this business as late as 1950,
more than 3 years after Bufalino came to the union. That is a
letter from C.M.A.C. and the copy of the original guarantee agree-
ment.
Senator Curtis. That will be 3-D, received for reference.
(The document referred to was marked "Exhibit 3-D" for refer-
ence and may be found in the files of the select committee.)
Mr. Kennecy. What about the Ace Automatic Music Co. ?
Mr. Kaplan. For Ace Automatic Music Co., we have the copy of
the 1949 tax returns of Bufalino, showing he declared a partnership
loss from that company of $13,194, more than 2 years after he went
into the Jukebox Union. That return is being studied.
Mr. Kennedy. Do you have that here ?
Mr. Kaplan. We don't have that there.
Mr. Kennedy. Could w^e have that made an exhibit, Mr. Chair-
man, when we obtain it ?
Senator Curtis. Without objection, it will be inserted in the record
at this point.
Mr. Kennedy. Then the Nickelodeon Co. ?
Mr. Kaplan. Yes, sir. That was a company in which Mr. Bufalino
had the setup to sell records to jukebox operators, and with him the
other incorporators were Mr. William Presser of Ohio and Mr. Frank
Calland of New York.
Mr. Kennedy. Both about whom we have had testimony ?
Mr. Kaplan. Both about whom we have had testimony; yes, sir.
Mr. Kennedy. Can w^e get the documents on Nickelodeon ?
Mr. Kaplan. We have all of the documents on Nickelodeon, includ-
ing tlie labels of the company, the names of the several artists that
invested to sign up and did sign up because by their telling them that
because of their connection with the union they would be able to push
their records successfully, the one share of stock which appears to have
ever been issued in Nickelodeon, which was subsequently given to Mrs.
Bufalino, and the final certificate of dissolution, along with the
19852 IMPROPER ACTIVITIES IN THE LABOR FIELD '
original articles of incorporation and the balance sheets of the \
company.
Senator Curtis. These papers will be marked "Exhibit 4" and let- :
tered and received for reference only. ^
(The documents referred to were marked "Exhibit 4" for ref- ;
erence and may be found in the files of the select committee. )
Mr. Kennedy. When was that company in operation ? -
Mr. Kaplan. The company started November 5, 1952, and filed a"
certificate of dissolution some time in 1955.
It might be noted that one of the trustees and talent scouts for the J
company was Joseph Blumetti of Youngstown, who was a convicted^
white slaver, and a trustee. i
Mr. Kennedy. Mr. Chairman, he had been convicted of white J
slavery. And he is a Teamster official also. •
Mr. Kaplan. This also includes a series of invoices which show that
local 985 paid for a lot of the costs of incorporation of this company.^
It paid for the costs of printing the labels. This was buried in a mass ^
of invoices that they submitted to the union. As a further indication .
of the purposefulness of getting the union to pay for this, we have an
invoice for work done by an accountant who worked for the union and
did some work for this company. Wlien he was interviewed, he said ^
that he had originally submitted two bills, copies of which we have,'
here, one to the union for $45, and one to the company for $55, and he'i
was told by Mr. Bufalino to lump it into one bill and send it again ^
in a bill for $100, which was then paid by union check. ''
Mr. Kennedy. Do you have the Meli-Dy Kealty Co. ? •
Mr. Kaplan. Yes, sir. ^
Mr. Kennedy. What was the Meli-Dy Kealty Co. ?
Mr. Kaplan. That was a partnership of Bufalino, William Meli, .
and attorney for the Juke Box Employees Association, Irving Acker-"
man. ^
After it had been in operation a short period of time ,it became a ;
corporation in which the stockholders were the wives of these several ■
persons. Mr. Bufalino testified when he was here recently that it
had ceased operations about 5 or 6 months ago.
Mr. Kennedy. Wnsn't it Mr. Irving Ackerman who made a state-
ment publicly in Detroit, at least it was reported in the paper, that he ^
had not been a partner of Mr. Bufalino ?
Mr. Kaplan. Yes, sir. ,
Mr. Kennedy. And the public prosecutor then made the statements
that he made in connection with that ? ;
Mr. Kaplan. Yes, sir.
Mr. Kennedy. The documents show that they were, in fact? ^
Mr. Kaplan. I think there was no question about it ; Mr. Ackerman !
was 25 percent partner.
Mr. Kennedy. Mr. Ackerman was invited by the committee in a !
letter to testify before the committee if there was any false statement in ]
connection with him, and he has refused to do so.
Mr. Kaplan. Yes, sir. ^
Mr. Kennedy. Now the rest of it. ^
]VIr. Kaplan. The Meli-Dy Realty Co., a partnership, and Meli-Dy ]
Realty & Management Co., a corporation, showing some of the balance :
sheets, journal entries, the 1954, 1955, and 1956 reports of the State of
Michigan. j
IMPROPER ACTIVITIES IN THE LABOR FIELD 19853
Senator Curtis. Are those two companies the continuation of the
same enterprise ?
Mr. Kaplan. Yes, sir; the corporation succeeded the partnership.
Senator Ctjrtis. The entire group will be marked "Exhibit No. 5,"
and the respective documents lettered.
(Documents referred to were marked "Exhibit No. 5" for reference
and may be found in the files of the select committee.)
Mr. Kexnedy. We find him also a business broker in the coin-
machine field?
Mr. Kaplax. Yes, sir; there was sworn testimony given before
the Michigan Department of Revenue with reference to the failure
to put revenue stamps on a cigarette machine belonging to Vern
Huntoon, He stated during the course of that that one of the explana-
tions was that these machines did not really belong to him. He had
been solicited by Mr. Bufalino by telephone to sell five of his good
locations to Joe LaSalle, who was an attorney for some of the under-
world figures of Detroit.
This is a transcript of his sworn testimony in the hearing before
the Michigan commission.
Senator Curtis. That will be made exhibit 6 and received for
reference.
(Document referred to was marked "Exhibit No. 6" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Do we find that most of the employees of Mr. Buf a-
lino's union have criminal records?
Mr. Kaplan. Yes, sir; we do. Almost every male emphv.ee or
active official on the payroll has had a criminal record. We have an
exhibit of that.
Senator Curtis. That will be marked "Exhibit 7" and received for
reference only.
(Document referred to was marked "Exhibit No. 7" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Do we also find that the union Cadillac was used
in New York by Angelo Meli, who was formerly Public Enemy No. 1
in Detroit, and used at the wedding of Profaci and Tocco in New
York on June 4, 1955 ?
Mr. Kaplan. Yes, sir.
Mr. Kennedy. And that the union Cadillac was used by Mr. Angelo
Meli at this wedding?
Mr. Kaplan. Yes, sir ; Mr. Angelo Meli was observed by the New
York police drivino; this Cadillac and the report was made to police
authorities in Michigan.
Mr. Kennedy. Mr. Profaci and Tocco had played prominent roles
in these hearings ?
Mr. Kaplan. Yes, sir ; they have a long background in the Detroit
underworld activities.
Mr. Kennedy. Do we find that the union expended large sums of
money for flowers each year ?
Mr. Kaplan. Yes, sir ; the union expended gross amounts of money
for flowers. Since 1953 we scheduled all their expenditures for
flowers, fruit, candy, and I think the figures are totaled up in your
witness sheet.
36751— 59— pt. 57 2
19854 IMPROPER ACTIVITIES IN THE LABOR FIELD •
However, the whole total for the period January 1953 to June 1957 }
was $8,023. It averaged out better than $1,600 a year. This has :
some significance. This was brought to Mr. Hoffa's attention back j
in 1953 when he was first — when he had taken the place of Mr. Bufa- \
lino when he was ill, when the books of the union were being subject ■
to a Government investigation, and nonetheless it continues, and there |
are some very strange people who get some of these items. Eaffaele ;
Quasarano, for example, about whom we have had testimony before \
the committee, is a notorious narcotics peddler. In 1953 a basket was ,
sent to him and Mrs. Quasarano in the value of $25.75. It was signed .
"Congratulations, Tony and Bill Bufalino of Teamsters Local 599."'
Baskets were sent to Frank Halland in Brooklyn, Mrs. William^
Pressman, Albert Salupo — Mrs. Salupo died in Mrs. Buf alino's arais j
in 1953. Each of the baskets was signed, one Bill Bufalino; one ;
Frank Halland ; and one Hoff a and Brennan. The total bill for that
was $311. \
There was a bill for a basket, a funeral basket to Serritella, a hood- '
lum associate of Mr. Bufalino, $51. Baskets were sent to Mrs. Bufa- ^
lino who had a baby girl }.
Mr. Kennedy. We don't have to go through all that. \
Mr. Kaplan. One was sent to Mr. Previant. Some were sent to ■,
Mr. Hoff a. ^
Mr. Kennedy. Do you have the records in connection with that to
put in as an exhibit? j
Mr. Kaplan. No, sir ; we do not. _ j
Mr. Kennedy. Do you have it broken down into a memo ? 3
Mr. Kaplan. Yes, sir. ]
Mr. Kennedy. May we have that made as an exhibit for reference ?i
Senator Curtis. That will be exhibit 8 for reference. '
(Document referred to was marked "Exhibit No. 8" for reference-
and may be found in the files of the select coimnittee. ) \
Mr. Kennedy. Do we have a list of Mr. Buf alino's associates? ;
Mr. Kaplan. Yes, sir. ^ i
Senator Curtis. The people that we have established as being hisi
associates ? .,
Mr. Kaplan. These are persons we have established very clearly as ,
being connected with Mr. Bufalino. What we have done is list their '
names, their police numbers, and the numbers of arrests, without in- \
eluding every arrest but some of the more significant ones equally with .'
the number of convictions. j
I think it is of some significance to note that of 34 associates listed, i
they total 484 arrests among them and 92 convictions. ^
Senator Curtis. Is that an official document in some court? \
Mr. Kaplan. Sir, that is based upon the official criminal records^
that we have obtained from various police agencies and the FBI. |
It is an abstract of it. '
Senator Curtis. It is an abstract prepared by this staff ? i
Mr. Kaplan. Yes, sir. |
Senator Curtis. As contrasted with these other documents that are '
copies ? i
Mr. Kaplan. Yes, sir. :
Senator Curtis. All right; it will be received as exhibit 9 f or ^
reference. j
IMPROPER ACTIVITIES IN THE LABOR FIELD 19855
(Document referred to was marked "Exhibit No. 9" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Now, we have the fact that early back in 1951 he
even had this reputation as being involved in certain criminal activi-
ties.
Mr. Kaplan. Yes, sir. At that time he was attempting to get ad-
mitted to the bar by reciprocity or by motion. He himself wrote a
letter reflecting his conversation with the clerk of the Supreme Court
of the State of Michigan, which shows that he resented being known
as a racketeer or person connected with racketeers, but that appar-
ently was his reputation at that time.
Mr. Kennedy. Does it show that the bar association turned him
down for admission at that time based on his reputation ?
Mr. Kaplan. Yes, sir; the bar association did turn him down, and
I have been told also by the clerk that they would never admit Mr.
Buf alino on the basis of his character.
Mr. Kennedy. Even though that is a letter from Mr. Bufalino,
that letter reflects the fact that they turned him down on that basis.
Senator Curtis. Is that a letter written by Mr. Bufalino ?
Mr. Kaplan. Yes, sir; to Mr. Jay Mertz, secretary of the State
board of law examiners at the Capitol Building, Lansing, Mich.
Senator Curtis. It may be received and marked as "Exhibit No.
10."
(Document referred to was marked "Exhibit No. 10" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Are there any other documents there ?
Mr. Kaplan. That is it, sir.
Senator Curtis. The committee will stand adjourned until 10 : 30
tomorrow morning.
(Members of the select committee present at the taking of the recess
were Senators Curtis and Capehart.)
(Whereupon, at 5 p.m., the select committee recessed, to reconvene
at 10 : 30 a.m., Tuesday, July 7, 1959.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
TUESDAY, AUGUST 18, 1959
U.S. Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington^ D.C.
The select committee met at 10 :30 a.m., pursuant to Senate Resolu-
tion 44, agreed to February 2, 1959, in room 3302, Senate Office Build-
ing, Senator John L. McClellan (chairman of the select committee)
presiding. '
Present: Senator John L. McClellan, Democrat, Arkansas; Senator
Karl E. Mundt, Republican, South Dakota ; Senator Sam J. Ervin,
Jr., Democrat, North Carolina; Senator Frank Church, Democrat,
Idaho; Senator Barry Goldwater, Republican, Arizona; Senator Carl
1. Curtis, Republican, Nebraska; Senator Homer E. Capehart, Re-
publican, Indiana.
Also present : Jerome S. Adlerman, assistant chief counsel ; Robert
r^T^^®^' ^^s^^*^^<^ counsel ; Rosemary K. Kennedy, acting clerk.
The Chairman. The committee will come to order.
(Members of the select committee present at the convening of the
session: Senators McClellan, Mundt, Goldwater, Curtis, and Cape-
hart.) ^
The Chairman. The Chair will make this brief statement.:
T A^- "^®^^®^s ^f t^^ committee will recall, at a session on July 15,
I believe, it was agreed that we would call certain experts in the field of
political science to discuss the problems of political spending and ac-
tivities by both union and management.
Originally we had on our tentative list some six persons whom we
regarded as highly competent in that field, and who had been either
selected or suggested by members of the committee or members of the
statt. Iwo of those, however, have indicated that they are unable to
appear today.
The four witnesses that we shall hear today, and whom I believe ai-e
present, are Dr. Alexander Heard, of the University of North Caro-
lina, Chapel Hill, N.C.; Dr. Sylvester Petro, professor of law. New
York University, New York, N. Y. ; Dr. Herbert Alexander, director of
Citizens Research Foundation, Princeton, N.J.; Prof. Andrew
Hacker, Cornell University Department of Government, Ithaca, N.Y.
I might say that this subject matter that we will be inquiring into
has been the subject of prior investigations, to some extent, at least,
by other legislative committees, principally the Gore Subcommittee
on Privileges and Elections back in 1957; also a Select Committee To
19857
19858 IMPROPER ACTIVITIES IN THE LABOR FIELD '
Investigate Campaign Expenditures, a House committee, under the ;
chairmanship of Congressman Boggs, m 1953. . ,•,!„ 10 I
The princ pal statutes on the subject, I am advised, are m title 18 ,
United States Code, sections 608, 609, 610, 611, and 612, copies of ^
which have been distributed to committee members. !
(At this point Senator Ervin entered the hearing room.) ;
The Chairman. Is there any other comment before we proceed? .
The Chair mav make this announcement : Notices have been given of ^
this hearing today that they would be executive sessions The Chair •
at the mom'ent is not quite clear as to what was ^aid back at the time :
we aereed to hold these hearings with respect to whether they should :
be executive or public hearings. I have not refreshed my memory ^
from the minutes of those meetings. i..;„„ eW -
But since there is more than a quorum here, there now being six ;
members of the committee present, and no one seems to have any
objection to the hearings being public, and the Chair knows of no •
1-eason why the testimony that is expected should not be made public,
without objection the Chair will declare the hearings public and per-
mit anyone to attend, the press and others, who may desire.
Is tliere objection to the hearings being pubhc? ,
Senator MuNDT. No objection. j
The Chairman. The Chair hears none ^ , ,, '
Senator Goldwater, do you wish to make a statement ? j
Senator Goldwater. Mr. Chairman, I agree that there have been ,
committees of the Congress m the past several J^ai-s who have had ,
the power to study this particular question. I am not satisfied, how- ,
ever that any of these committees really went into the question.
Senator Curtis served, I believe, on the Gore subcommittee. I at-
tended at least one of those hearings, and probably t.wo. There was no
staff study made into the way that unions operate m politics.
(At this point Senator Church entered the hearing room.) .
Senator Goldwater. There were reports made as to the number of 1
dollars that were reported to the Clerk of the House, but there were ]
Z reports made as to the number of dollars spent to obtain man- ^
power, to obtain publicity, et cetera, in Federal elections. '
The distinguished chairman will recall that he chaired another se- {
lect committee, the one on lobbying and campaign expenditures, ot ]
which I was a member, and our staff did, in a very very limited way, :
get into that field, with an investigation into the^ Wayne County Cen- 1
tral Committee, in Wayne County, Mich. Unfortunately, I do not
have my copy of that report here. It is coming to nie shortly.
But that is the only instance in my experience m the Senate wiien
anv committee has gone into the roots of the problem, which is. How
do unions operate in politics without reporting these sums to the
Clerk ? How do they get around the Corrupt Practices Act and ttie
reference to it in the Taft-Hartley Act? , ^ ^ . . .,
I speak for myself, but I think I speak for other members of the
committee, that We decided union activity in politics would be one ot
the 11 points that would be pursued by this committee. I envisioned
a thorough staff study into this siibect. ^ .i . .1 ^ ^^^^
In fact I requested at the outset of the investigations that the stall,
in checking through books of the unions, make a record of any sums
spent for political purposes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19859
I have no reason to know that they have done it or that they have
not done it. I liave not asked for that information, nor has it been
given to me. I presume that they followed my request and have
sought out these expenditures in the books.
Our purpose, as I recall it, in calling these distinguished scholars
before us, was because Senator Church and I, being appointed as a
subcommittee to try and set up some modus operandi for the full
committee in this field, mutually agreed that it would be advanta-
geous to approach it first from an academic standpoint. Neither one
of us. Democrat or Republican, feel that this should be turned into a
political donnybrook where we air all the linen of all the candidates
w^ho have received help from unions or who have been opposed by
unions.
The fact is that the act has been accomplished. The problem is,
should we as a Senate committee, shirk what I feel to be our responsi-
bilities in this field in looking into the way that the job is done, and
listening to suggestions as to how we might proceed from here from
these gentlemen that we will have with us today.
But as far as I am concerned, this one single problem constitutes
one of the greatest threats to our freedoms. I can see the day not
too far distant when we are going to have the politics in this country
polarized with union funds providing the blood on one side and cor-
porate funds providing the blood on the other side.
Those of us who wish to remain in politics must be either independ-
ently able to do it in a financial way, or we must become beholden, not
to the concepts of Jefferson or the concepts of Lincoln, but to the con-
cepts of labor or the concepts of big management.
That is my whole interest in this. It has been m^y whole interest
all through the years that I have been opposed to union and corporate
activity in the political field.
I wanted to make that brief statement, Mr. Chairman, in the earnest
hope that we can approach this problem as a serious problem in-
volving our Republic and our Constitution and our concept of polit-
ical life.
^ I have no desire to hurt anybody, in or our of politics. I will re-
sist any efforts made to turn this into a political donnybrook, be-
cause I feel tliat this is probably the last opportunity that this Con-
gress or the United States is going to have for many, many years, to
get into this very important field.
I am hopefii], Mr. Chairman, that these hearings this morning will
give us a basis on which to guide ourselves as the staff goes out to
investigate in this field.
The CiiAiRjNrAN. Are there any further comments before we proceed 'i
Senator Curtis. Mr. Chairman?
The Chairman. Senator Curtis.
Senator Ctt.tis. Reference lias been made to the Gore investigation,
the Gore report. I am sure that I am correct in my statement that
a great portion of the material that went into the voluminous Gore
report is the result of a staff study or gathering of facts at the direc-
tion of Ciiairnian Gore. Those facts were not presented in committee.
Thoy went direct from the staff's research into the report.
Consequently, they were not presented in such a way that there could
b^^ cross-examination or interrogation about the facts or what they
meant.
19860 IMPROPER ACTIVITIES IN THE LABOR FIELD
For instance, the staff was directed to find a list of prominent people \
in the American Bar Association, members of the house of delegates, \
officers in the American Bar Association, and others. Then contribu- '
tions to candidates and parties were assembled that those individuals ■
made. \
Following that, there was a reference in the Gore report as to the
political activity of leaders of the bar association. The bar associa-
tion took exception to this. There was no concerted effort on the part ■
of the bar association. Very properly they objected. It was an infer-
ence that they felt should not be brought. 5
I do not want to debate the Gore report, but I merely think that -
it should be pointed out, the type of study it was. \
That is all, Mr. Chairman. ;
The Chairman. Are there any further comments before we proceed ?
(At this point Senator Gold water withdrew from the hearing '
room.)
The Chairman. Senator Ervin?
Senator Ervin. The only comment I have is that I am in a state of ,
uncertainty as to the extent of our jurisdiction in this field. <
(At this point Senator Goldwater returned to the hearing room.) !
Senator Ervin. I have serious doubts whether the resolution estab- ^
lishing this committee would give us the right to investigate this field :
in its entirety. The wording of the resolution, it would seem to me, :
would restrict our power to investigate illegal or improper practices. \
Of course, we can understand what illegal practices are, but when i
we gpt down to improper practices, I think it is improper for anybody
to si)end any money to accomplish my defeat when I am running for
office. ]
I am ready to go along, however. J
Senator Goldwater. If the Senator would yield at that point, I ,
think this involves violations of the law on both sides.
The Corrupt Practices Act is very plain. I do not know of a law
that is written more plainly. It says you cannot give money to candi-
dates in a Federal election. It is being done. In fact, the Supreme j
Court has upheld the right of unions to do this in the way that they ^
are doing it. !
Now, if the laws say it cannot be done, the Supreme Court says ^
it cannot be done, in effect., I think it is within our province to decide j
wliat illegal acts are being done on both sides of the fence and what we ;
recommend as changes. '
Frankly, I look on this Avhole thing as a mornl (juestion more than I ,
do as a legal question.
If it is immoral, it is improper. I don't think it is morally right
to take the dues money of a Republican or a Democrat and use it in an ^
election against the man that he is going to work for and vote for. ;
On that one point hinges my whole feeling that we are correct in j
getting into this. I
Senator Ervin. I would agree. T think we would all agree that that !
is an improper practice. j
Senator Goldwater. That is what we want to get at. j
Senator Ervin. Of course, and I understand the present statute, it ]
is illegal to use corporate funds or union funds in a Federal election. ;
The Chairman. Is there anything further? ;
IMPROPER ACTIVITIES IN THE LABOR FIELD 19861
Senator Church. Senator Capehart?
Senator Church. I would only observe, Mr. Chairman, that I am
sure the Senator from Arizona would agree with me that if the
question is of illegality, and if the Supreme Court of the United
States has passed upon an act of Congress and has construed a
certain practice to be legal and in conformity with the provisions of
that act, then the question becomes one of propriety, and the decision
for Congress to change the law if, in the judgment of the Congress, it
ought to be changed.
But the practice until the law is changed is a legal one because the
Supreme Court has the final authority to construe the statutes.
Senator Goldwater. That is perfectly true. But on the other
hand, how is the Congress going to act without having any information
in the field?
In other words, liow is it done ? That is what we are interested in.
What recommendations do people have to make in the field who
look at it purely from the abstract viewpoint, not being politicians, not
being devotees of either political party in their studies^
I think they can tell us their own opinions as to the illegality, the
immorality, the impropriety, if they feel that way, and what should
be done in a legislative way to correct it, if anything.
Senator Church. I think there is no argument between us, actually.
My only point is that where the question of illegality is raised, the
Supreme Court is the final arbiter of that matter, and if the Supreme
Court has said that a given practice is a legal one, then it would be a
misnomer to refer to it as an illegal one under existing law.
Senator Capehart. Mr. Chairman, I might say this : It is against the
law for a union to use union funds. It is likewise against the lav/ for a
corporation to use corporate funds. Of course, I dislike very much, as
others, to have the unions use their money to defeat me or defeat
somebody else, because there are Democrats and Republicans in unions.
By virtue of the same thing, a corj^oration has a lot of stockholders,
in which there are Democrats and Republican stockholders.
It gets down to the point as to when is a man who is employed by
a corporation acting on his own, and when is a man employed as an
officer or member of a union acting on his own or acting for the union ?
It is not going to be easy to draw a line and distinguish between
when he is acting as for himself in politics, or when he is acting for
the corporation or acting for the union, because in the case of a cor-
poration he draws his pay from the corporation, and in the case of
a union, if he is an officer, he draws the pay from the union.
(At this point Senator Mundt entered the hearing room. )
Senator Capehart. You might get to the point some day where
maybe nobody could make a contribution because of conflicting
interests.
About the only thing I am certain of is with Senator Ervin, that
I don't think it is proper to use money to defeat me.
The Chairman. I have had some improprieties inflicted on me,
then.
Senator Capehart. Well, I have never yet been drafted, and I have
never yet been elected unanimously.
The Chairman. All right, gentlemen.
Senator Mundt, have you anything before we proceed ?
36751— 5»—pt. 57 3
19862 IMPROPER ACTIVITIES IN THE LABOR FIELD \
Senator Mundt. No, Mr. Chairman. J
The Chairman. Very well. ^
Dr. Heard, will you come forward, please ? \
You do solemnly swear that the evidence you shall give before this i
Senate select committee shall be the truth, the whole truth, and nothing I
but the truth, so help you God ? ;
Dr. Heard. I do. I
TESTIMONY OF ALEXANDER HEAED
Senator JMundt. Is it necessary to swear these people ? /
The Chairman. This is an investigating committee. I am not !
going to take any testimony that is not sworn. A legislative com- ■
mittee is different.
1 wash to make that explanation to you gentlemen. But this is an .
investigating committee where we are placing witnesses under oath, ',i
all witnesses, and since this is one of the subject matters I don't see 1
how I can depart from it. It is not any discourtesy to you. j
It is a procedure that I think to be" consistent with we must follow. ]
I wanted to make that explanation. ■
Senator IMundt, will you preside for a moment ? I must leave the '
committee room. j
(At this point Senator McClellan withdrew from the hearing room.) ,
Senator Mundt (presiding). Will you give us your name, pleasej
and something about your background before you begin your \
testimony ? '
Do you have a written presentation that you have copies of ?
Dr. Heard. No. I have some notes from which I will speak.
Senator Mundt. All right. Proceed in your own way.
Dr. Heard. My name is Alexander Heard. I am a professor of •
political science at the University of North Carolina.
Senator Mundt. Thank you. ]
You have heard the chairman's statement as to the purpose of the !
investigation. :
Will you proceed in your own way and tell this committee wiiat j
you think we ought to learn ? \
Dr. Heard. What I thought I would do, and will proceed to do,-
unless you ask me to go along differently, is to talk about what seems :
to me to be some of the very great difficulties involved in exploring this :
subject.
I worked as a consultant with the Gore committee, and have pur-
sued my own studies of this subject for several years. |
I want to talk from the point of view of a technician largely, and ■
talk about the technical difficulties of trying to get the kind of factual
picture which seems to me to be essential in understanding the subject. ]
Senator Mundt. Doctor, as you raise the difficulties, if you can sug- \
gest some solutions to them, it will be very helpful to the committee, j
Dr. Heard. I will do what I can. \
Senator Mundt. We are well aware that we have a lot of difficulties ]
in this field, and we need guidance as to how to solve them. ]
Dr. Heard. Surely. i
I w^ill not take into consideration the jurisdiction of this committee^
nor the course that might be involved. '
IMPROPER ACTIVITIES IN THE LABOR FIELD 19863
I do want to emphasize, however, what I think to be the most im-
portant feature that any committee must consider. I have read a great
deal of the testimony that has been offered by Senate committees and
House committees over the years. I had some little experience of my
own and have observed the staffs of committees at work.
(At this point Senator McClelland returned to the hearing room.)
Dr. Heard. I think perhaps the most important thing to recognize
at the outset is that this is largely a technical matter, involving ade-
quate time, adequate staff' preparation, and effective procedures.
I emphasize, I think it is a technical matter, to a large extent, to get
the kind of factual picture which seems to me to be essential if you are
going to understand the difficulties of enforcing the present acts, or
attempt to devise modifications in them.
The first conclusion that I have come to is this : As soon as you ask,
informally or formally, before this committee or in private conversa-
tion, persons from labor organizations or from corporate organiza-
tions whether they have been doing things that violate section 610, or
violate the Taft-Hartley Act or violate the Public Utility Holding
Company Act — as soon as you ask them whether they have been doing
things that conform or do not conform — you block off any real possi-
bility of getting the kind of information that you want from them.
1 would advocate that the goal be to get a picture of what goes on
without regard — without any reference at the outset — to whether these
things are permitted under the acts that now exist, and whether
they they are or not, without regard to the constitutional questions
that are involved, I find when I speak privately with people on both
sides of this question that the moment the concept of whether this is
educational or political comes into the conversation, the moment the
concept of whether this is a voluntary contribution or involuntary
contribution comes into the conversation, I am largely forestalled, be-
cause we get into a wrangle on questions of definition at that point.
So if this is possible — whether it is possible, I don't know, but you
will know — if it were possible to approach this thing entirely from
the point of view of getting a picture of the behavior that exists, with-
out any implication that his is good or bad, legal or illegal, the chances
of getting testimony from people on all sides of this question will be
substantially increased.
Senator Goldwater. In summing that portion of your testimony
up, you would disregard the question of immorality, illegality, and so
forth, and merely find out what is going on ?
Dr. Heard. I would do that at the factfinding stage, which is where
I understand we are now.
Senator Goldwater. I agree with you on that.
Dr. Heard. My second point is that I think that anyone would con-
clude from looking at the testimony and the reports of previous com-
mittees— many of which have been very competently staffed, of
course — anyone, however, would conclude that the quality of the testi-
mony offered and the quality of the reports written could have been im-
measurably improved if there had been adequate staff work in advance,
with adequate personnel and with the amount of time necessary to
prepare.
It seems to me that often the questioning of witnesses in the past
has proceeded too much from the top of the head and without adequate
preparation.
19864 IMPROPER ACTIVITIES IN THE LABOR FIELD
Let me give you an illustration of the kind of thing that I mean.
As an experiment, a year or so ago I took the available, formal,
official reports of 12 unions, the 12 largest unions at that time, and
read through them to see what information about politically relevant
activities I could find from their financial reports.
Remember, I Avas not concerned with w^hether this was a political
activity in accordance with the definition of GIO, but simply whether
they were politically relevant activities.
I took the available public reports of these 12 unions. I concluded
that there were at least 13 different headings under which a politically
relevant expenditure might be made.
I will indicate what those 13 headings were. There may be other
such headings.
I am not suggesting that each of tlie unions that I looked at made
politically relevant expenditures under each of the headings. I am
simply saying that this is tlie place one would look, I would think, to
see whether or not there is an expenditure that on its face seems to be
of interest to this committee.
For example, some of the unions list perfectly overtly "Donations."
Some of these are donations to charitable causes, some are donations
to political causes. Some of the unions have a political department.
That is the second heading.
The third heading some of them have is "Citizenship "
Senator Church. What is the second heading?
Dr. Heard. "Political Department."
Senator Goldwatcr. That would be like COPE or PAC ?
Dr. Heard. Well, yes; but I think the International Ladies' Gar-
ment Workers, for example, has a department which is called the
political department, if I remember correctly. You find that in their
budget.
The third heading is "Citizenship Program." There are expendi-
tures that are politically relevant made in tlie name of good citizenship.
Fourtli is "Education and Information." That is another heading.
Fifth is "Communications." There are periodicals, broadcasts,
m emor a nd um s.
Senator Gold water. May I interrupt there ?
Dr. Heard, Yes, sir.
Senator Goldwater. Am I not correct in my memory that this is
the area in which the Supreme Court has ruled that the unions may
spend money for periodicals, broadcasts, et cetera, and it was tlie area
that the Federal court extended to television in the Detroit trials of
about 2 years ago ?
Dr. Heard. This is my impression, but I can't give you authoritative
testimony from memory on the point.
Senator Goldwater. This is the general area where the Supreme
Court has ruled that they could operate in.
Dr. Heard. That is correct.
Senator Goldwater. I will not go ahead with that. I just wanted
to make that point.
Dr. PIeard. My point is that if we can get a picture of what goes on,
regardless of the legal or constitutional questions that may be involved,
it would be helpful.
Sixth is the heading "Public Service Activities."
IISIPROPER ACTIVITIES IN THE LABOR FIELD 19865
Seventh is "Public Relations."
Eighth is "Research."
Ninth is "Legislative Activities."
Tenth, "Legal Department,"
Eleventh, "Expense Accounts."
Twelfth, "General Administrative Costs."
Finally, thirteenth, "Salaries."
(At this point Senator Capehart wiiiidrew from the hearing room.)
Dr. Heard. It seems to me, for example, that if staff had the time
and the manpower to examine such available reports as these, you
could develop a basis for much more intelligent questioning of wit-
nesses who would come before you. You could ask these people
specifically Avhat are the items included under such headings as
these, and in this way, 1 would think, develop a better picture.
What I have said here about labor union expenditures can also be
said, I think, about corporate expenditures.
I have, myself, given a little more testimony on this point in the
past, and there has been perhaps more discussion of it, but, again, let
me illustrate eight headings under which politically relevant cor-
porate expenditures, I think, might also be found.
My point here is that this might serve as the basis for questioning
and for testimony.
I will not elaborate on these unless you ask me to.
First is "Expense Accounts." Some are the same as in the case
of labor organizations.
Second is "Contributions in Kind"; that is to say, contributions of
goods or services, rather than cash.
Third, "Advertisements in Political Journals."
Fourth, "Payments to Persons in Public Relations Activities."
Fifth, "Fees to Lawyers."
Sixth, "Salaries and Bonuses to Officials or Employees."
Seventh, "Payments to Other Organizations," with which organiza-
tion the corporate is affiliated.
Eighth, "Direct Expenditures from the Corporate Treasury."
Again, I offer that as simply illustrative of the kind of thing I
think one might look for.
I believe that in the testimony that has been offered over the years,
there are a great many suggestions that would provide the basis for
further testimony. I assume that in the files of this committee there
must be information that has come up in the last 2% years, which
would also provide the basis for systematic testimony.
I have been referring to oral testimony. I might refer, Senator
Curtis, to our experience in the Gore committee in the attempt to
devise a questionnaire which would be circulated to corporations and
to labor unions in an effort to get from them systematic information
about politically relevant activities.
This questionnaire went through at least two drafts, as I recall.
It was submitted to some corporate officials and some labor officials
for their criticism. We were never able to devise a draft that really
impressed us as being effective.
The time ran out and it was never actually used.
But the experience there indicated a considerable difficulty in ac-
tually getting at this information by asking either corporations or
19866 IMPROPER ACTIVITIES IN THE LABOR FIELD
labor unions themselves. The moment you use the concept of politi-
cally relevant activity you ask them for so much that it becomes ter-
ribly burdensome.
Perhaps sometimes even impossible for them to provide.
1 will give, if there is no objection, Mr. Adlerman a copy of those
questionnaires that we did not use, and if they are of any help we can
use them.
They will illustrate, I think, the difficulty in getting at this problem
by questionnaire, because they do represent a great deal of energy and
elfort and time.
Senator Goldwater. May I ask that they be made an exhibit, Mr.
Chairman, to be available to the members ?
The Chairman. We can take that up in a moment. ( See p. 19883.)
Dr. Heard. That is about all I have. I have some notions as to how
much time would be involved in a study, such as I would be most in-
terested in. Whether that is appropriate for this body or not, I do
not know. I will make one or two observations on that pomt in
closing.
I do not believe it is too early now to start, if you really wanted to
get a broad, full-scale picture. I am not confining myself simply to
the labor-management matters that are clearly within your jurisdic-
tion. I am talking about getting as broad a picture of election
finances as is technically possible to get. I think you have to work in
an election period, obviously.
Nineteen hundred and sixty is the election period upon us. I believe
you would have to start almost immediately if you w^anted to recruit
the kind of staff that is necessary and if you wanted to do the kind of
groundwork that is essential, the self-education of the staff that is nec-
essary in order to do a competent study, and to provide the time to
avoid some of the inescapable errors that inevitably creep in when you
are handling the volume of information that you would necessarily be
liandling. I tliink that tlie staff should have on it professional people
of several kinds. You would certainly need one, two, or three people
who, themselves, are intimately acquainted with union organizations
and union activities, much more so than the average political scientist
would be or the average lawyer would be.
You would need specialists who are concerned and informed about
corporate organization.
I would think you would need, one, two, or three people who have
tried to study the subject dispassionately without being associated
with either side of this controversy in the role of consultants or staff
members.
I think you would have to have four or five or six statistical people.
Handling numbers in the volume that would be involved is a very
difficult and complicated task. You would need people skilled at this.
I think you would have to have a corps of people, three, four, or five
people, who would constitute a field staff, who could make the kind of
field inquiries which were not adequately made in 1956.
You cannot do this overnight. You have to have persons who be-
come acquainted with the factual situation, who know the procedures,
know how to go about it, who can develop some knowledge of their
IMPROPER ACTIVITIES IN THE LABOR FIELD 19867
We have found in the past that as these reports come in, for ade-
quate interpretation you often need someone acquainted with the area
from which tlie reports come.
We know tlie nomenclatures vary from State to State.
You would need a group of persons wlio could travel sufficiently to
acquire this knoAvledge. You would need the customary gToup of
legally trained persons.
I suppose such a staff, shooting from the hip, more or less, would
number 25 or 30 professional people. They would have to be sup-
ported, I would think, by maybe a comparable number of clerical and
stenographic people. There would liave to be adequate money for
travel. Perhaps that staff would be adequate if it were at work for a
period of 15 or 18 months.
Mr. Chairman, 1 think that is all I have to say, unless there are
questions.
Senator Church. Mr. Chairman, I have some questions I would
like to ask.
The Chairman. Thank you. Dr. Heard.
Just let me get one or two questions before you.
I apologize that I have not been able to follow your testimony — I
shall read it— because I have been occupied with sorne other matters as
you have been testifying.
Here is something I would like to inquire into. We have a law pro-
hibiting corporations from contributing; they can't contribute, of
course, without violating the law. We have a law prohibiting unions
from contributing to the campaign funds for candidates to the Senate
and House of Representatives. They cannot contribute without vio-
lating that law.
I am under the impression that often there is an attempt to circumr
vent the law, and maybe it is circumvented, for all practical pur-
poses— maybe they don't actually circumvent it if this can be proven —
Jby a corporation simply having some of its officials or some of its rep-
resentatives turning in an excessive expense account, with some of that
money going to a candidate for Congress; likewise, a labor union will
charge it off to organizational expense or something else without any
voucher or anything to show where it actually went.
So far as the records of the company, the corporation, and the rec-
ords of the labor organization, there is nothing to indicate the law has
been violated.
I am of the opinion tliat sucli practices maybe have been engaged in.
What would be your suggestion as to how you can effectively cope with
that evil, if it is regarded as an evil, or that impropriety, to make it
milder ?
Dr. Heard. Senator McClellan, I am not sure
The Chairman. To me, that is the crux of this thing, how to get
at it.
Dr. Heard. I realize that it is. I am not sure that you can. I am
not sure that it is actually possible to devise a statute that would
achieve tliat goal.
One of the reasons is that, in my view, there is this terribly difficult
problem of definition. Many such expenditures to which you allud-
ed are made indirectly. Many such expenditures will be defended as
falling outside of almost any definition that you might devise — and
19868 IMPROPER ACTIVITIES IN THE LABOR FIELD
i
certainly outside any definition that would be held constitutional that ]
you can devise.
Personally, my approach to this whole problem is on a somewhat ;
broader front. I feel that the entire field of campaign finance isn't |
susceptible to just one formula for solution. I think we have to have
a piecemeal approach that will come at the thing from several angles.
Personally, I favor taking as much pressure o& of candidates as
possible by encouraging contributions from sources other than labor
unions and corporate organizations. •'
I, myself, favor tax concessions of one kind or another. .;
The Chairman. May Hnterrupt at that point ? i
Dr. Heard. Yes, sir.
The Chairman. I agree and support the general objective of en- '
couraging others to contribute. But I don't know how that would I
necessarily keep the labor boss or the labor leader that wants to gain ]
control of or build up political power or influence, to keep him from j
going on and contributing j ust the same. ]
Dr. Heard. Well, he well might.
On the other hand, I believe that if a candidate has other sources :
of campaign money, he may personally be freer to reject such offers of :
assistance.
The Chairman. In other words, he may not yield so easily, he may '
not be tempted to accept money that may have strings on it. from
either corporations or labor organizations. ,
Dr. Heard. That is correct. Just as I feel also that if it were possible \
in some way to make radio and television time available, presumably \
on a limited basis, and hopefully at a reduced cost or no cost to the :
candidate — I am not suggesting here that the broadcasting industry ;
should bear this cost necessarily — if it were possible to make this •
very important means of communication available to at least certain '
candidates, this would, again, reduce the pressure that is on the candi- :
date and on the party. ;
My approach to this would be, on this kind of piecemeal broad front, J
recognizing at the outset that probably it isn't possible to accomplish i
a complete prohibition of the financial involvement of unions and cor- \
porations in political activity. I think that is a very ambitious goal i
to seek. I would try to po'int toward the identification of all the ;
varieties of politically relevant activity in which unions and corpora- |
tions engage, and then single out those that you think are most im- !
portant for limitation and can feasibly be limited. ;
That is why I advocate trying to get the full picture, of course.
The Chairman. Senator Church, I wanted to get this thought be-
fore us at the outset. 1
Senator Church. I believe those, questions to be very important, i
The Chairman. Very well. Senator Church, you may proceed. '
Senator Church. Dr. Heard, you have had a great deal of experi- j
ence in this field, and you have made it a field of special study, have j
you not, in your professional career ? [
Dr. Heard. Yes. ]
Senator Church. As I understand your testimony this morning,!
you are making your recommendations to this committee upon the .
ibasis of a comprehensive undertaking that is directed toward deter- j
mining, in the first instance, what the whole scope of politically rele-
IIVIPROPER ACTIVITIES IN THE LABOR FIELD 19869
vant activities may be in tlie labor nnioii field and in the corporate
field.
Then, having made that kind of inquiry, it is your contention that
this committer or some other connnittee of the Congress that under-
takes the job, would then have a basis on which to reconnnend pos-
sible Federal legislation ; is that correct ?
Dr. Heard. Yes.
(At this point Senator McClellan withdrew from the hearing
room.)
Senator Church. I understand your testimony also to be that here-
tofore in connection with inquiries made by other committees, it is
your opinion that no such adequate or comprehensive survey of the
entire picture has ever been made of the kind that you are now recom-
mending in your testimony this morning ?
Dr. Heard. We respect what has been attempted, and I think what
you have just said is correct ; yes.
Senator Church. If such a survey and study were to be made, then
I understood you to testify that in your opinion it would require, in
order for it to be properly done, a very specially skilled staff that
understands the nature of the problem, the nature of the inquiry, and
the ways that the matter has to be approached if the Congress is go-
ing to get the knowledge that it is seeking. Is that correct ?
Dr. Heard. That is correct.
Senator Church. You mentioned that such an inquiry, to be helpful
and adequate, as I recall your testimony, ought to take place in con-
nection with a national election, and you suggested that the next na-
tional election being 1960 that this might be an appropriate time to
undertake such a study.
Do you think that this kind of study could be undei-taken apart
from the framework of a national election ?
Do you think that it might properly be undertaken now, for ex-
ample ? Do you think it can be completed prior to the next national
election ?
Dr. Heard. Senator Church, I am doubtful for this reason: My
observation is that a great many of the campaign organizations that
become active in any campaign, senatorial campaign and certainly in
a presidential campaign, are created ad hoc. They come into exist-
ence, they go out of existence. Memories are short.
I don't mean anyone tries to conceal, though, of course, that is done.
Memories are short. Records get lost, if there are any records.
It is very, very difficult to come after the event and get anything but
memoi-y. You can't get very much of that.
Senator Church. In other words, if the intention is to do a thor-
ough and factual and comprehensive job, then, in your opinion, it
needs to be done at the time that these various activities are, in fact,
taking place, and that, necessarily, would be at a time of a national
election.
Did I understand you to say that in your opinion such a study
would require between 15 and 18 months to complete ?
Dr. Heard. Well, I am thinking that here it is August, and you need
some montlis after the election in order to summarize and publish what
you learn. I think that it would take 15 or 18 months to recruit the
36751— 59— pt. 57 4
19870 IMPROPER ACTIVITIES IN THE LABOR FIELD
staff, assemble it, begin the training, begin tlie education of the people i
on the staff. The great difficulty in the past has been — and I am not i
referring simply to the Gore committee, for this has been going on for
30 or 40 years at least — the great difficulty has been that for whatever i
reason, these studies have been commenced very late in the game with
ad hoc staffs, and the simple administrative procedures followed have
often been wholly inadequate and inappropriate.
I suspect that the Gore committee procedures were the best yeti
developed, actually.
That is why I emphasize this advanced period of preparation as I
well as the period necessary for actually studying the campaign as it
proceeds.
So I would say 15 to 18 months.
Senator Church. Would you think that beginning in the next ses- i
sion of the Congress, if the CongTess were to adopt a resolution estab- ^
lishing a special investigative committee to undertake the kind of'
survey that you describe, that such a committee could be set up in time |
to do the necessary recruiting work and assemble the necessary staff-
for purposes of surveying the next national election, the 1960 election ?
Dr. Heard. If a resolution were passed in January, do you mean ? !
Senator Church. Presumably it would need to be passed, I should 1
think, in the early months of the next session. i
Dr. Heard. Well, of course, the sooner you start the better. Janu- i
ary or February is a great deal better than August or September.]
You could do a very useful job starting in January or February. I
Senator Church. Do you recommend that, knowing what you do|
about previous investigations that have been made in this field, would |
you recommend that such a committee, investigative committee, bei
established as early as possible in the next session for the purpose of I
surveying the 1960 elections ?
Dr. Heard. I would recommend that it be established, wliether by i
special committee or otherwise. I would recommend that the prepara- i
tion begin as soon as possible after today.
Senator Church. This committee, as you know, is operating under 1
a special resolution that has once been extended. The life of the com-
mittee under the resolution expires on the 31st of January of tliisi
coming year.
That would mean, according to the authority now vested in this
committee, that we would have from now until the end of January if
we were to undertake the kind of investigation you have recommended."
In your opinion, would that give us sufficient time to do the kind of
job you think needs to be done ? fi
Dr. Heard. No, sir, I do not believe between now and the end of '
January, January 31, 1960, it could be done.
I do believe— let me amplify that— that very useful testimony could !
doubtless be developed between now and then,' particularly on the nar-'
row and specific concerns of this committee. I think you could build t'
on the kind of available information that I have illustrated here, andi;
you could develop a good deal of information.
But I don't think that you could do the kind of comprehensive job i
that seems to me to be optimum.
Senator Church. In other M-ords, if I understand you correctly, we j
might do a partial job, not unlike the kind of job that has heretofore i
IMPROPER ACTIVITIES IN THE LABOR FIELD 19871
been done by other committees, but not the kind of comprehensive sur-
vey you think the needs of the problem require.
Dr. Heard. Witli this one distinction : You see, most of these other
committees have been active during the period of an election.
Senator Church. Our investigation would not take place during
that period.
Dr. Heard. That is right.
Senator Church. Are you acquainted with the kind, the character,
of the investigations that this committee has undertaken, the general
character of the investigations that we have undertaken and have
conducted in the past 2 or 3 years ?
Dr. Heard. Yes.
Senator Church. Are you acquainted with the kind of staff that the
committee has, the investigative staff ?
Dr. Heard. No, I am not acquainted with the staff, except two or
three people I have met.
Senator Church. You wouldn't be in a position to give us your
opinion as to whether or not the committee's present staff is consti-
tuted in line with the recommendation you have given, or the kind of
staff you think the requirements of this inquiry would require ?
Dr. Heard. I am simply not acquainted with the present staff.
Senator Church. I have one further question, Dr. Heard.
It is obvious from the lines of inquiry that you have recommended
that the scope of such an investigation would be very broad indeed.
There are many activities that are the constitutional prerogatives
of people who live in a free society or of organizations that are formed
within a free society, with which this Congress has no power to in-
terfere.
There are many other activities that are listed here that I should
think would fall in the category of political activity of a character
that promotes the general interest, and that the Congress would not
want to interfere with, even though it might have the authority to do
so.
Finally, there are certain kinds of political activities that we might
take exception to and might want to undertake to change through
legislative action.
So this w^hole question becomes a very complicated one and needs
to be very carefully appraised if we are to do good with our work
and not bad with our work.
Dr. Heard. That is right.
Senator Church. For that reason, I take it, you would recommend
not a limited or myopic kind of approach, but, rather, the kind of com-
prehensive survey that you have recommended to this committee.
Am I correct ?
Dr. Heard. That is coiTect. I make no judgment as to whether this
is the best group to do it, you understand. I have no opinion on that.
Senator Church. I believe that is all, Mr. Chairman.
Senator Mundt. I have one question.
I thought you said something about favoring a sort of two-stage in-
vestigation. You said there was one phase to which this committee
might appropriately devote itself, and there is another overall picture
that might require a year, 18 months, 2 years, or, maybe, like our
permanent Senate Investigating Committee, forever, because you
never really get to the end of the road under a comprehensive thing.
19872 IMPROPER ACTIVITIES IN THE LABOR FIELD
Would you indicate what you have in mind conccrninjr the initial
stage, or perhaps the pertinent points to which tlie committee might
now devote its attention ?
Dr. Heard. What I mean there is : If you were to decide that you
Avanted to do something, whatever you could, between now and the
end of January 1960, 1 think that through
Senator Mundt. You may not be familiar with the proceedings of
the committee, but that decision has already been made. It was made
nearly 2 years ago. So we are bound by our own commitment to try
to do something. "We would like some guidance from you as to what
3' ou think we might be able to do.
Dr. Heard. I think you might do something. I say again, without
any knowledge of this staii', that I think for the procedure to be fruit-
ful a considerable amount of staff preparation would have to go into
the groundwork prior to calling for testimony.
I think you could ask questions about practices, general practices,
because we are not in the process of an election. It is pretty difficult,
sometimes, to go back a year and a half, '2 years, 4 years, or 6 years,
and ask people what happened then.
But I believe you could develo]) useful opinion and some facts
about what general practices are on the part of corporations and of
labor unions.
You couldn't pin testimony down to events tliat are in process, but
I believe that you could certainly obtain from officials of both types of
organizations some information. If you can succeed in getting away
from the accusatory atmosphere, I believe you can.
Senator Mundt. May I say we are not ir^terested in putting any-
body in jail for something that happened in the past. We are simply
trying to avert these improper practices from occurring in the future.
Dr. Heard. That is correct.
Senator Mundt. We would approach it on that basis. In our other
investigations, we have had the accusatory. But our thought here was
to be exploratory, investigative, informative, so that perhaps some-
thing we do now miojht result in a little more appropriate political
behavior in 1960, 1962, and 1964.
Senator Goldwater ?
Senator Goldv/ater. Doctor, in 1957 you reported from your studies
that there was an amount of money spent in the 1956 elections, if my
memory serves me correctly, of around $170 million.
Dr. Heard. In the fall of 1956 I reported on the basis of the most
careful work we could do, that in 1952 the total expenditures in the
country, out-of-pocket expenditures, not contributions in kind, but
out-of-pocket expenditures, for all offices, both nomination and elec-
tion, came to $140 million.
Senator Goldwater. Did that include local offices?
Dr. Heard. Yes, sir.
Senator Goldwater. That was eveiybody running for office ?
Dr. Heard. That is correct.
Senator Goldwater. Did you come to a conclusion as to what was
spent in 1956?
Dr. Heard. During the campaign before the election was over, I
was asked for an estimate by the Subcommittee on Privileges and
Elections, and as I recall I made a guess, I think, of $175 million.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19873
I would new say, if you asked me the same questions, that probably
the increase was certainly no more than 10 percent, and perhaps less.
So I would say in 195G, using 1952 as a basis and without repeating
the whole estimate for 195G, I would say $150 or $155 million.
Senator Mundt. This committee, of course, being a branch of the
Federal Government, has no jurisdiction in local elections. State elec-
tions, legislative elections. We might have jurisdiction in the field
of Federal elections. Certainly Congress has.
Did you break down those figures, therefore, after showing the
total amount of out-of-pocket expenditures, by whatever rule of thumb
you used, in dealing with Federal elections, Congressmen, Senators,
and the President ?
Dr. HEAiiD. No, sir: I did not. 1 don't think I can.
We broke it down in this way : Expenditures made at the national
level, expenditures made at the State level, and at the local level, the
three levels.
But the moment you tried to determine how much was spent for a
candidate you get into the unsolvable problem of one committee sup-
porting more than one candidate and you don't know how much to
allocate. I camiot give you an estimate on that.
Senator Goldwater. Witli our understanding that we don't have
your breakdown as to possible Federal expenditures in 1956, what
was the total reported to the Clerk of the House for Federal elections
in 1956? Do you recall?
Dr. Heard. No. The total that we accumulated with the Senate
Subcommittee on Privileges and Elections, I think, was $33 million,
as I recall. I do not know how much was reported to the Clerk of
the House, though.
Senator Goldw^ater. So there is a vast amount of this that is not
being reported and is Ijeing spent in ways other than direct contribu-
tions to a candidate ?
Dr. Heard. Not all of the money that is contributed to candidates
is reported. I don't mean that it is illegal. I mean some States don't
require it, and some conunittees are not, under present law, required
to report it.
Senator Mundt. There are certain kinds of expenditures in which
a candidate participates which are not reported, which are not neces-
sary to report.
. Dr. PIeard. That is correct.
Senator Goldwater. Such as the tilings we discussed earlier, radio,
television, newspapers, that are contributed by interested parties.
Frankly, I don't see how you can stop that, because it involves free-
dom of speech.
Dr. Heard. That is true.
Senator Goldwater. If you, for instance, want to support a candi-
date in North Carolina by buying 15 minutes of radio time, and you,
yourself, are extolling his virtues for that 15 minutes, I don't think
we can ever stop that. I don't think we should attempt to.
Senator Mundt. We should not try.
Senator Goldwater. Let me ask you this: Do you agree that this
is a problem, this matter of spending for elections?
Dr. Heard. Yes, sir; I tliink I do.
Senator Goldwater. Would you agree with my earlier statement
that the long range danger might not be so long range, and that is
19874 IMPROPER ACTIVITIES IN THE LABOR FIELD ;
the control of what are now two parties, built more or less on philo- ^,
sophical grounds, would be controlled by organizations interested only j
on economic grounds, which would be labor on one side and business ]
or management or corporations, what you call it, on the other '^ i
Dr. Heard. I think I would take a more moderate view than that |
I understood you to express. It seems to me that the political inter- j
ests that are involved are very diverse and numerous in the country, i
Certainly Senator Ervin and I know that in North Carolina there is ;
more than just the polarity that you alluded to. I do not believe '
that I would go along with the statement that the danger is as great •;
as I understood you to express it. ;
I feel very deeply that public confidence in governmental and po- .<
litical procedures is highly important. Rightly or wrongly, I do feel i
that in the press and in the public generally, and even among the j
elected officials, there is some unhappiness and lack of confidence in the
way we finance our campaigns. I think this, itself, is very undesirable, j
I think it creates a lack of faith, if you wish, in democracy, in the kind ;
of government we have.
1 am interested in it from that point of view very much. I think ]
that that is a sufficient point of view, really, to be concerned about it. |
When I look at all of the 50 States, and the different conditions that ;
exist, and all the different kinds of factore that elected officials must ;
pay attention to— that are not always economic at all and which are ;
not always directly related to organized labor — not always directly
related to corporate management — I feel that this diversity of inter- I
est gives us a much broader and more stable base, I guess, for po- ]
litical influences than this polarity you suggest. ]
Senator Goldwater. I do not want to run this on, but let us look i
at the ultimate result of propaganda campaigns conducted by both ,
sides, that is, the labor movement and the business movement. '
Would it not be possible sometime in the future to have a person ]s ;
opinion as to what is best for him associated with a business candi- ]
date or a labor candidate rather than a candidate of the Democratic i
side or the Republican side ? '■.
I am looking at this thing in the long range, knowing what can be ;
accomplished by these methods. I might say I think both of them are '
attempting to do that today. J
Dr. Heard. Well, I suspect that as long as we maintain a two- ,
party system, our experience would be not milike that in Great ;
JBritain,* perhaps, where, as you know, the Labor Party, which ex- 1
plicitly represents the labor movement, has, because it has appeal f or <
a majority of the electorate, has tended to be more moderate, whereas
the Conservative has tended to be less conservative.
As I understand the studies of British elections, the constituents .
of both parties, actually, are not so clear-cut as the labels on the par- ;
ties would suggest. That is, the Labor Party must gain the support '
of a great many people outside the labor movement, people who may
not necessarily feel identified with the labor movement, in order to .
win. '
I would think that probably our experience in this country would '
be of that nature, rather than the kind of experience you get in'
countries where there are multiparty systems and where political par- J
ties can become almost equivalent to pressure groups. \
IMPROPER ACTIVITIES IN THE LABOR FIELD 19875
In some of the continental countries you see this, where there might
be a half dozen parties, one exclusively labor, one agrarian, and so
on.
Senator Goldwater. I will wind this up.
You made the statement that you feel that this should be a deep
study by a competent staff, tliat it would take 12 to 18 months. Sen-
ator Mundt has informed you that we have already made up our
minds about this subject, that if we are going to go into it, this pres-
ent staff would do it. I think we have to be practical in this. I can't
envision either party passing a resolution creating a committee to
investigate political activity of unions, if this particular party is in,
and corporations, if the other party is in. I am in the position of the
man who has his last horse on the pony express, that you have to get
there with this horse.
If we fool ourselves by saying that this problem is going to be
solved by some committee that is to be appointed in the next session
of this Congress, we are just playing around with foolishness. That
is the practicability of politics, and you recognize it the same as I
recognize it. It is one of the reasons I suggest why under the Re-
publicans we were unable to get what I consider an adequate investi-
gation in this field. It has been a problem under the Democrats.
I feel we have been unable to get into this field. We do have exam-
ples of staff studies that I think indicate that a staff could do this, at
least do preliminary work, a staff that is not made up of political
science experts, necessarily.
Under the Gore committee, at the request of Senator Curtis, one
investigator went to Flint, Mich., and I think turned in a rather
startling report.
(At this point Senator McClellan returned to the hearing room.)
Senator Goldwater. In the last committee I served with, with the
present chairman, the Special Committee To Investigate Political
Activities, Lobbying, and so forth, a team of two or three went into
Flint, Mich., and turned up a ratlier detailed report. These men, as
I understand, were auditors. There was an election going on at the
time.
They were, of course, met with much hostility.
But in spite of that, they turned up some very remarkable figures
that I felt should have been pursued, but which were not. There are
a number of excellent books on the subject. I have a ratlier complete
library which indicates a lot of acadenric work has been done.
The gentleman to follow you. Dr. Petro, has written three books.
The best and latest one is "Power Unlimited ; the Corruption of Union
Leadership," which touches on tliis.
"Labor ITnions and Public Policy" by Drs. Chamberlain, Bradley,
Riley, and Pound.
"Management vs. Teamsters," "Union Solidarity," "The Union
Member Speaks" — there are a number of books.
The latest that I put into the record by the University of Michigan
shows that three out of five union members in that State do not want
their unions in politics.
So we do have some academic bases to go on. You have read "Tlie
CIO and the Democratic Party," I presume. What do you think
of that book ? Is it comprehensive ?
19876 IMPROPER ACTIVITIES IN THE LABOR FIELD ;
'!]
Dr. Heard. As I recall it, it is a series of five cases, I believe. It 'i
was 1950. I think tliat this kind of case approach of limited situ- !
ations is extremely useful, surely.
Senator Goldwater. I wanted to state my position, that I do not
agree with you that this has to be done by some committee in the <
next session of Congress. It might be that we would have to ask
the continuation of this committee to do just this, if Vv'e get into it.
But I have enough confidence in our stall to feel that they can at
least do the bookkeeping end of it. They can find out what the other ;
staff members were able to find out that was reported in the final
report of the Special Committee To Investigate Political Activities,]
Lobbying, and Campaign Contributions. j
I would take exception to your testimony only in that inst^ince. i
Dr. Heard. I don't really think there is much disagreement. It j
is a question of how far down the road and how many roads you want j
to go down. Obviously, you can do more in 18 months than in 8,1
and more in 8 than in 2. j
Senator Mundt. I think the Senator from Arizona quoted the Sen-I
ator from South Dakota saying that we would proceed with our pre&- j
ent staff. I think in the main, that would be correct, but I would not |
want to preclude the employment of scientists or professionals from j
joining the staff.
Dr. Heard., I have no brief for political scientists, but persons who;
were informed about the activities you were studying.
Senator Mundt. Senator Ervin, perhaps you would like to ask some ,
questions.
Senator Ervin. I find myself in substantial agreement with the
witness. I think he points out effectively the problem and I think
he has made some practical suggestions. I certainly agree with him j
in the observation that there is no way that you can separate expendi-
tures for Federal offices and for State offices. I have been vei-y con-
scious of that.
If you have a candidate for slieriff in my county, you spend money ;
to get him elected, advertise him with the candidate running for^
Congress on the same ticket.
In North Carolina, our expenditures are made through the State ^
committees, and expenditures for local offices inures to the benefit.!
of those running on the same ticket for State or National offices. r ■
I am also glad to say that I can share a certain amount of Dr."
Heard's optimism. I get concerned about the abuse of power from
any source, financial powers. i
But the way the world is constructed, it is abuse of that power which]
tends to nullify eventually. The fortunate tiling in the country is that '
a lot of people decry this, and I would judge that Dr. Heard probably]
shares this view. i
You have two political parties, and in each of the two political j
parties you find persons with all kinds of views on governmentaH
questions. !
You find in the Democratic Party that some folks are conservative,^
some are accused of being reactionary. Some are radical and some^
are liberal. It is the same in the Republican Party. I think thatj
those who are conservative in each party have a tendency to keep the-j
liberals from becoming radicals, and those who are liberals haA^e the'
tendency to keep the conservatives from becoming reactionaries. J
IMPROPER ACTIVITIES IN THE LABOR FIELD 19877
As long as you have two political parties which maintain witliin
their membership such diAerse groups as each party maintains, the
Union is going to be safe in the long run, the United States.
I think this is set forth in "The Price of Union."
You have diverse elements in both parties which have been the sal-
vation of the country, that made the United States function as a gov-
ernment. It has been said that the only political party that had any
character was the Republican Party when it first started out. It had
so much character and so much opposition to slavery that they prac-
tically destroyed the Union.
It was said in one publication, that after a short time, the period in
which they showed the character, the Republican Party stopped show-
ing that character, and, in eftect, the Union was saved.
This is American politics at work. While the use of money in great
amounts is to be deplored, I don't think that it threatens the destruc-
tion of the country. In other words, there is still hope that the coun-
try can survive as long as both political parties are composed of ele-
ments having diverse interests and diverse views.
That is a very practical thing. Read the political platforms, and
both of them will promise everything to everybody. If either party
tried to fulfill its platform to the letter and give everything to every-
body that they promised, they would be in the fix of individuals diag-
nosed to be victims of schizophrenics.
The Chairman. Senator Curtis.
Senator Curtis. Wouldn't there be a place on this staff for some
politicians?
Dr. Heard. For politicians ?
Senator Curtis. Yes. I will elaborate a little more.
Someone who has been in politics or who has managed a campaign
or who has been a candidate, he would, by experience and intuition,
know what he was looking for, where to look, and how to trace it.
Would you think that would be true ?
Dr. Heard. Surely. Of course, to some extent I would assmne that
the committee members themselves would assist on this particular
problem. But I would certainly
Senator Ervin. You are referring to politicians rather than
statesmen.
Dr. Heard. Obviously, naturally, certainly. Senator Curtis, to an-
swer your question.
Senator Curtis. We cannot get this solved by a study too much in
the abstract, can we?
Dr. Heard. Well, the problem has usually been in the past that it
ceased to be in the abstract, I am afraid. All I am looking for is
persons who, first of all, are generally competent, and, secondly,
who have the knowledge necessary of a teclinical kind to make the
investigations you want to make.
(At this point Senator McClellan withdrew from the hearing
room. )
Dr. Heard. Naturally, persons who have had political experience
in labor organizations or in campaigns or on the corporate side
would be very helpful.
The only thing you would want to guard against is an individual
whose viewpoints were so partisan and he was so wedded to either a
36751— 59— pt. 57 5
19878 IMPROPER ACTIVITIES IN THE LABOR FIELD
candidate or one of the parties as opposed to the other that he
wouldn't be useful. That would be the only thing you would guard
against, I would think.
Senator Curtis. For instance, if you saw a report where various
labor groups admitted in their reports contributing to a single can-
didate $25,000, $30,000, or $35,000, that would be notice to anybody
that has been in the political game that that money wasn't raised
voluntarily.
If you have ever tried to raise money, you would know you couldn't
do it.
(At this point Senator McClellan returned to the hearing room.)
Senator Curtis. I have one further thought about this staff study.
I think we run into a disappointment when we flout hmiian nature.
It is not human nature for someone to conduct an investigation against
their own interests. Is that correct ?
Dr. Heard. That seems reasonable.
Senator Curtis. I would like if this is undertaken along the lines
you suggest, I would like to see two statfs. I would like to see a
committee of, say, about three Democrats and one Republican in-
vestigate the Republican expenditures. That many Senators would
hire the staff and put them to work.
Then I would like to see another senatorial committee of about
three Republicans and one Democrat investigate the Democratic ex-
penditures, and hire their staff to do that. My reason for putting one
minority on there would be so that he would know everything that
goes on and be free to tell it at any time.
I think then you could get a pretty good story and have sufficient
check on it that it would have to be accurate, that there would be
no suppression.
But I think that every investigation that goes on just cannot be
divorced from the contest itself.
Senator Goldwater. Would you yield?
The Chairman. You may proceed, Senator Curtis.
Senator Curtis. Dr. Heard, does the usual and periodic check by
the Internal Revenue Service, even though admittedly spotty, and it
has to be because of so many taxpayers, serve as somewhat of a check
on padded expense accounts ?
Dr. Heard. Yes, sir.
Senator Curtis. But it does not with the tax-exempt organization
that files no report or is liable for no tax, does it ?
Dr. Heard. I don't know, now. Perhaps I better not offer an opin-
ion on that.
Senator Curtis. What I mean is if a corporation entere into con-
spiracy to have a number of their employees and officers, or even just
a few, put something in their expense account under some other head-
ing, and then have it contributed to a candidate or a party, there
is a certain risk; is there not? Would you not think so, even though
you are not qualified as a tax expert ?
Dr. Heard. Well, I am sure there must be some risk. How much
risk I simply do not know. I don't know, really, Senator Curtis,
frankly, the extent to which the Service looks behind the expense ac-
counts and reports that are filed. I simply don't know. But I would
imagine that any violation of law obviously entails some risk, whether
large or small.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19879
Senator Curtis. But if on the other hand an entity that, does not
pay taxes has their people, whether they are international representa-
tives or soniethint; else, make contributions and an allowance is nrade
in their expense account, there is no agency of Government, even
periodically and on spot basis, looking over their shoulders. That is
one thing.
(At this point Senator Mundt left the hearing room.)
Senator Curtis. Suppose a citizen is a stockholder in a company,
and he does not like the political activities of that corporation. Does
he have a remedy ?
(At this point Senator McClellan left the hearing room. )
Dr. Heard. None except to get out, to sell his stock, I suppose,
which may not be a real remedy.
Senator Curtis. And no one company has a monopoly on what is a
good investment.
Senator Goldwater. He can sue.
Senator Curtis. Yes, and he can sell his stock.
Dr. Heard. Of course, it may be painful to sell your stock some-
times. It depends on the company, I suppose.
Senator Curtis. Suppose a man was located in an industrial area in
a State where the union shop is law, and some force, compulsion, or
coercion, is upon him to make political contributions and he disagrees
with the political position of the union. What remedy does he have?
Dr. Heard. I suppose like the stockholder, technically. He can go
and get a job somewhere else, if he wants to.
Senator Curtis. The stockholder does not have to sell his home,
take his children out of school, move to a new community, and hunt a
job if he decides to sell some stock because he disagrees with the
management of the company. But it is conceivable, if someone is
going to change their employment, that at least some of them might
have to do all of those things. Is that correct?
(At this point Senator McClellan returned to the hearing room.)
Dr. Heard. Yes.
Senator Curtis. Senator Goldwater assisted me in taking some
testimony of some men who came here onetime with a request to
appear before the committee on constitutional liberties. They lived
in the State of Michigan. Compulsory unionism exists there — union
shop. They were compelled to contribute to the political party not of
their choice. One of those men was a candidate for office; I believe
county clerk. He had been a loyal union member all his life. His
money, in part, was used in a full-fledged campaign against time. He
was campaigning as hard as he could for this job as county clerk.
Yet they were running up and down the streets, financed by the unions,
with sound trucks having loudspeakers, urging people to vote for
his opponent and he w^as paying, in part, for it.
Dr. Heard. Senator Curtis, I thmk if w^e are going to talk about
either compulsory contributing or voluntaiy contributing, I would
have a lot to say on that. I think you run into this problem in cor-
porate organizations, and obviously you run into it in union organiza-
tions.
I have, myself, spoken with officials of business organizations who
felt under a compulsion to conform to the views of the head of the
company or the corporation. This is a problem, I think, anywhere,
19880 IMPROPER ACTIVITIES IN THE LABOR FIELD
where you have an organization. The way I look at it is as follows,
and I think this would apply in a union : What you really have is a
continuum. The whole principle of solicitation of funds for any
purpose, as I understand it, whether it is for a community chest, a
Red Cross, or a university alumni annual giving, or a political cam-
paign, is to create a climate of opinion and atmosphere in which the
individual feels under a pressure to conform. Somebody knocks on
my door in Chapel Hill wanting $2 for the heart drive, and I give.
I am concerned about the heart drive, but also I don't want any
neighbor to think I wouldn't ^ive the $2. Do you see ?
I think all organized solicitation is oriented around creating this
atmosphere of social pressure in which the individual will feel obli-
gated to give. Obviously, in some situations the social pressure is
overt, explicit, forthright. In others it may be very passive and per-
missive. I suspect that in labor unions, as in corporations, that situa-
tions are found between these two extremes.
Senator Curtis. Wlien Dave Beck made the statement that he had
placed either thousands of dollars or tens of thousands of dollars,
I don't know which, in cash on the desk of candidates for his office,
but he would not expose them, I think there were means of collecting
that money other than just social pressure.
Dr. Heard. Well, there may well be. But I was discussing when
you have a voluntary contribution and when you do not.
Senator Curtis. Yes, it is a matter of degree, that is true.
Dr. Heard. I don't know anything about Mr. Beck's finids that
you referred to here.
Senator Curtis. This case that Senator Goldwater referred to,
coming from Flint, Mich. ; it was not a staff member that found
that. I was making a speech in Flint, Mich. I was sought out at
the hotel and asked if I would meet with some union officials. They
brought out the books and showed me a transaction where dues money
was voted into one fund and then another fund and then contributed
to a party, and also a motion to hire people to work in the campaign
and that they were to be paid so much a day and so much expenses.
These people who brought it to me said "We haA^e to contribute to
that, and we disagree with the whole viewpoint that that is support-
ing." I photostated it. I caused the things to be photostated, and
I took them back to Washington with me. They have never been
denied. Let me say also that I think there are abuses on the other
side. I have been a candidate for a long, long time and I think that
the real, sustaining friends that I have over a period of time are
those who do not want anything but good government as they see it,
and that the person who is going into shenanigans to make this con-
tribution you probably do not want anyway.
Would you not say, Dr. Heard, that our objective, the ultimate
law that we would pass, should be one that should encourage political
activity on the part of the citizens?
Dr. Heard. Yes, sir.
Senator Curtis. Would you agree that it should have a minimum
of policing apparatus, for the Government to be looking over people's
shoulers and putting them in jail for this or that ?
Dr. Heard. Well, here my viewpoint would depend really, I sup-
pose, on what we mean by policing activities. I, myself, personally,
IMPROPER ACTIVITIES IN THE LABOR FIELD 19881
favor a reporting or publicity system that is designed with consider-
able regard for the burden it places on the politicians and the com-
mittee treasurers and others who have to conform to it. But I feel
strongly that the attitudes prevail in the United States almost require
us to liave as eifective a publicity system as we can. Rightly or
wrongly there is great suspicion when we don't. I think, therefore,
we are almost compelled to do what we can to improve the kinds
of reports that are required.
(At this point Senators Gold water and McClellan left the hearing
room.)
Senator Curtis. But whenever we go to the extreme of just pro-
hibiting, we may throw some roadblocks in the way of honest people
who want to give modest gifts to support the party, principles, and
candidates of their choice, and a minority in the country who wouldn't
have quite as much scruples might go ahead and do it under the
table. We do not want such a situation as that, do we?
Dr. Heard. No. As you know from our previous discussions, I
favor a positive approach to the problem. Measures which would
encourage contributions, rather than ceilings and expenditures.
For example, I doubt the feasibility of imposing a statutory limit
on the amount of money that can be spent. I would rather favor en-
couraging small contributions by various ways, making communica-
tions facilities easily available to candidates and that sort of thing.
Senator Curtis. I think we have a very complex problem here, but
I think the solution could be quite simple. I happen to be opposed
to compulsory unionism for any purpose. I think if we remove that,
we remove most of the scandals that have been revealed before the
McClellan committee. I would be disturbed about political activity
of unions if they did not have a situation where someone had to be-
long to hold a job.
On the other hand, I am conceding that there are abuses in the cor-
porate field. If the Internal Revenue Service could do something to
make more effective their control over padded expense accounts, and
possibly also give the stockholder the same contribution, I think this
then would become once more an individual's activity, freedom of
choice on the part of the individual, and maybe within proper limits
he could give to his heart's content towards his ideals and ideals of
government. You probably do not wish to respond to that, but that is
my feeling.
Senator Ervin. Dr. Heard, do you not think there is a good deal of
coercion in obtaining campai^ contributions by a political party?
In other words, here is a political party which may be in control of
the government of a county or of a city, or the State, and it sets up a
financial committee which goes and visits and solicits contributions
from all office holders. That is a species of coercion, is it not, in many
instances ?
Dr. Heard. Certainly. I said a moment ago that I think any ef-
fective fund raising involves in some form or another some degree of
coercion, if you want to use that word.
Senator Ervin. I have to say that sometimes when they go to raise
money to build a church there is a certain amount of coercion to the sub-
scribers.
Dr. Heard. That is right.
19882 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Ervin. I think that is almost inseparable in life. In my
remarks a while ago, I did not mean to imply that I did not thmk
there was need to try to strengthen legislation in this field, because
there is a great abuse in political life of financial power, just as there
is in any other kind of power. I agree with you m the observation
that as much publicity as can be obtained about campaign contribu-
tions is highly desirable, because the candidate is not likely to accept
a contribution from a source which would be suspected by the public
of desiring to control his official action after his election if that was
to be made public. So that is a very deterrent thing.
I do take a lot of consolation, however, out of the fact that the
abuse of power usually causes the reverse, the other direction. I think I
that was one reason in passing the Hatch Act, to stop coercion m this l
field by political parties. But it seems to me that you lay your finger i
right on the most crucial need today, some way to insure that the ;
different political parties have an opportunity to present their cause
to the public. I think that the coming of the television has almost j
revolutionized the approach of candidates to the people. _ It is very
unfortunate things that the cost of television is very high m the
political field. . ^i ^ ^i . •
I certainly concur wholeheartedly m your suggestion that that is I
something that we should try to devise some method about to insure
the us© of that media of communication for the presentation of the,<
views of candidates. ^ ,
I thank you for your very fine presentation. I
Dr. Heard. Am I excused now, Senator Ervm, or need I com© backs
this afternoon ? , n i
Senator Church. Before you leave, may I ask you two final ques- 1
tions ?
Dr. Heard. Yes, sir.
Senator Chuech. To set the record straight with respect to previousi
investigations of the Congress, were you a member of the staff of thel
so-called Gore committee?
Dr. Heard. I was a consultant to the staff.
Senator Church. That was a subcommittee on privileges and elec- \
tions that was set up prior to the last national election, was it not ? I
Dr. Heard. The subcommittee, of course, is a permanent subcom-;
mittee. The special staff as a supplement to their permanent staff wasi
set up mostly in September of 1956.
Senator Church. That was pursuant to a special resolution passed!
by the Senate ?
Dr. Heard. That is correct. . .
Senator Church. Wliat was the inquiry of the Gore committee?'
Was it to be a broad inquiry into all the sources of financing and
other matters relating to conduct of the national elections in 1956 ?
Dr. Heard. I don't remember the wording of the resolution. What
the committee decided to do, as I would phrase it, was to try to obtains
from as many committees and candidates — Federal candidates, and]
committees connected with their elections — to try to get information!
from as many of these committees in the States, and to some extent in
the counties, as was possible in order to learn the sources of their
funds and how the money was used, as well as the total amounts ihaM
were involved. i
IMPROPER ACTIVITIES IN THE LABOR FIELD 19883
There was recognition from the outset, for example, that you could
not consider going into the 3,000 comities of the United States. The
committee instructed the staff to focus on the 100 largest counties, as I
recall. There was some attempt made to get at coimty level organiza-
tions in the 100 largest counties, and they forgot about the other 2',900.
I think that is about it.
Senator Church. My point is this : We have precedent for the Con-
gress undertaking a broad investigation of elections in an election year,
pursuant to a resolution passed by the Congress, prior to the elections.
Dr. Heard. Senator Church, that is correct. That has occurred in
1952, 1944, 1936, and on back.
Senator Church. I think it is possible, having done it before, that
Congress is capable of doing it again. I do not take the view of the
Senator from Arizona, that this is mere idle speculation, for it has
definite precedent. It has been done in the past. I would favor that
kind of investigation, and certainly would like to join in the cospon-
sorship of any resolution looking toward the kind of survey that you
have described in your testimony this morning.
In the meantime, I think it is likely that this committee wdll do
what it can within the limited time that is left, to it, to inquire, at least,
into some aspects of this problem. I wanted to make that clear, be-
cause I do not think it is completely unrealistic to expect the Congress
in the next session from undertaking a broad investigation in this field,
and I hope it will.
Senator Ervin. If there is no objection on the part of any member
of the committee, the Chair will inform Dr. Heard that he is at liberty
to go. His attendance will not be further required.
We want to thank you on behalf of the committee for your coming
before the committee and making this practical and very fine presen-
tation.
Mr. Adlerman. The hearing will reconvene at 2 :30 in public session
in P-21 of the Capitol Building.
Senator Ervin. If the witnesses will be there at 2 :30, we will pro-
ceed with the hearing.
(Whereupon, at 12:30 p.m., the committee was recessed, to recon-
vene at 2 :30 p.m. the same day in room P-21, the Capitol.)
(Members of the select committee present at the time of the recess :
Senators Ervin, Church, and Curtis.)
afternoon session
(The select committee reconvened at 3 p.m. in room P-21, the
Capitol, Senator John L. McClellan, chairman of the select commit-
tee, presiding.)
The Chairman. The committee will come to order.
(Members of the select committee present at the convening of the
afternoon session: Senators McClellan, Mundt, Curtis, and Church.)
The Chairman. The committee will come to order.
Let the record show that the Chair orders the questionnaires testi-
fied to by Dr. Heard this morning be made exhibits 1 and 2.
(The documents referred to were marked "Exhibits 1 and 2" for
reference.)
19884 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman, Those are exhibits to Dr. Heard's testimony.
They will be identified in the order in which he identified them.
That was overlooked this morning.
Dr. Petro, will you come forward, please.
You do solemnly swear the evidence you shall give before tliis Sen-
ate committee will be the truth, the whole truth, and nothing but the
truth, so help you God ?
Dr. Petro. I do.
TESTIMONY OF SYLVESTEE PETRO
The Chairman. Dr. Petro, state your name, your profession, occu-
pation, and place of residence, please.
Dr. Petro. I am Sylvester Petro. At present, I am professor of
law at New York University School of Law. I am a member of the
Illinois bar and have been a student of labor law for most of my
adult life, the last 15 years.
The Chairman. How long. Doctor, have you held your present
position with the New York University ?
Dr. Petro. Ten years.
The Chairman. And your previous connections or positions?
Dr. Petro. I practiced law in Chicago for 4 years before then.
The Chairman. Since finisliing your studies, you have specialized
in labor law, is that correct ?
Dr. Petro. That is correct, sir.
The Chairman. Do you have a prepared statement ?
Dr. Petro. Yes, I do. I think I would do best to follow it very
closely because there are some matters upon which I think I can
assist this committee, matters of a technical nature.
The Chairman. Do you have copies ?
Dr. Petro. I gave Mr. Adlerman a copy yesterday.
The Chairman. I have one copy.
Dr. Petro. I have no more, I am sorry to say.
The Chairman. He did give one copy, but he does not have enough.
He does not completely comply with the rule, but there is no objection,
I assume.
Senator Curtis. No.
The Chairman. You may proceed to read your statement and
comment on it as you go along, if you like.
Dr. Petro. Thank you.
The Chairman. First, I want to thank you, and the witness this
morning, Dr. Heard — I want to thank each of you for responding to
our request and cooperating with us. We have a very difficult, deli-
cate, unpleasant task. We appreciate any help we can get. We wel-
come it and we need it. You are very kind to come and assist us.
That goes for all of you gentlemen.
Proceed.
Dr. Petro. One of the byproducts of my purpose in coming here
may be more immediate in its consequences than I expected my ap-
pearance to be. I believe that my statement may save this committee
and, therefore, the people of the United States, a considerable amount
of money. I believe that tlie statement will reveal that no investiga-
tion into current political activities is really needed. We have enough
IMPROPER ACTIVITIES IN THE LABOR FIELD 19885
before us, especially in the history of tlie current leo:islation, to indi-
cate that the thing to do is to repeal tlie ]'d^v wliich now exists, not to
pass further law. That is, the hnv relating; to political contributions.
The Chairman. Are you speaking now both from labor unions and
corporations, or just as to labor unions '(
Dr. Petro. One of the fundamental principles of my approach to
all legal questions, Senator, is that the law should apply equally to
all nersons in tlie country.
The Chairman. "We liave present laws against both — applicable to
both now. So you are testifying wnth respect to both '?
Dr. Petro. Yes.
With tlieir emergence as the most powerful economic organizatioiis
in the history of the United States, the large trade unions have
emerged also as powerful political organizations, perliaps the most
active such organizations in the country today. Their political activi-
ties first became a subject of deep concern after the Second World
War, and this concern was reflected by Congress in 1947, when in
framing the Taft-Hartley Act it included a section broadly pro-
hibiting contribution.s and expenditures by both labor organizations
and corporations in connection with Federal elections.
This legislation has had an unliappy career, with no successful
prosecution to date, and with the grave doubts held from the begin-
ning concerning its constitutionality still unresolved.
Now, as this Senate select committee has demonstrated, after 12
years of the Taft-Hartley Act both the economic and tlie political
power and activity of the large unions have increased dr<imatically,
and the grounds for appi-ehension Avliich existed in 1947 have been
magnified accordingly. The Taft-Hartley Act accepted the special
privileges and the ensuing power which prior legislation had accorded
labor organizations. It sought to avoicl the political consequences of
those privileges and power by the direct method of prohibition of
political expenditures. History has shown that to have bepii a mis-
taken approach. Commonsense suggests that a new approach is called
for today.
Senator Church. If I may interrupt at this j.oint, are you referring
specifically to section 610 of title 18 of the United States Code?
Dr. Petro. Yes. We should clear that up, Senator Church. The
present section 610 was originally enacted as section 804 of the Taft-
Hartley Act, verbatim, the same section.
Senator Church, I think it might.be helpful for purposes of the
record if we included at tliis point the actual text of the section, Mr.
Chairman, to whicli the witness has referred.
The Chair]man. I think tliat is a very good suggestion.
Without objection, it will be printed in the record at this point,
section 610 of the Criminal Code.
(Sec. 610 follows:)
Sec. 610. Contributions or Expenditures nv National P.anks, Corporations,
OR Labor Organizations.
It is unlawful for any national bank, or any corporation organized by author-
ity of any law of Congress, to make a contribution or exi>enditure in connec-
tion with any election to any political office, or in connection with any primary
election or political convention or caucus held to select candidates for any
p ditical office, or for any corporation whatever, or any labor organization to
19886 IMPROPER ACTIVITIES IN THE LABOR FIELD
make a contribution or expenditure in connection with any election at which
Presidential and Vice Presidential electors or a Senator or Representative in,
or a Delegate or Resident Commissioner to Congress are to be voted for, or in
connection with any primary election or political convention or caucus held to
select candidates for any of the foregoing offices, or for any candidate, political
committee, or other person to accept or receive any contribution prohibited by
this section.
Every corporation or labor organization which makes any contribution or ex-
penditure in violation of this section shall be fined not more than $5,000; and
every officer or director of any corporation, or officer of any labor organiza-
tion, who consents to any contribution or expenditure by the corporation or
labor organization, as the case may be, and any person who accepts or re-
ceives any contribution, in violation of this section shall be fined not more
than $1,000 or imprisoned not more than one year, or both ; and if the viola-
tion was willful, shall be fined not more than $10,000 or imprisoned not more
than two years, or both.
For the purposes of this section "labor organization" means any organiza-
tion of any kind, or any agency or employee representation committee or plan,
in which employees participate and which exist for the purpose, in whole or in
part, of dealing with employers concerning grievances, labor disputes, wages,
rates of pay, hours of employment, or conditions of work.
The Chairman. You may proceed, Doctor.
Dr. Petro. The first section of my statement is entitled "The Ex-
perience Under the Present Legislation.-'
The legislation presently in force was enacted in 1947 as section 304
of the Taft-Hartley Act, in response to the fears felt in Congress and
the Nation that the heightened political activity of labor unions dur-
ing and after World War II possessed a grave potential of harm.
As a result, to the then existing prohibition of political contributions
by unions and corporations Congress added a prohibition of any
"expenditure in connection with" elections to Federal office, primary
elections, and conventions or caucuses held to select candidates for
Federal office.
(At this point Senator McClellan left the hearing room.)
Dr. Petro. The breadth and generality of the new prohibition
created many difficulties even before it became law, and its career
in the courts has been unfortunate. Senator Eobeit A. Taft was
compelled upon several occasions during the Senate debates to hedge
his answers concerning the reach of the section. In some instances he
declared that an answer to the hypothetical question posed by oppo-
nents of the bill could not be given. (See 2 Legislative History of the
Labor-Management Relations Act, 1947, at pp. 1526-1535, 1546-1550,
1601-1604; large excerpts from the debates are quoted in the majority
and dissenting opinions in United States v. CIO, 335 U.S. 106.)
The few prosecutions which have been brought under section 304 in
the last 12 years have produced some interesting, and confusing, deci-
sions and opinions. The first prosecution was deliberately invited
when Mr. Philip Murray, then president of the CIO, wrote an edi-
torial favoring the election of one of the candidates for a congressional
seat in Maryland, and caused this editorial to be printed and circulated
in the CIO News.
(At this point Senator McClellan entered the hearing room.)
Dr. Petro. Presumably in order to insure violation of section 304
and thus to provoke a decision on the constitutionality of the section,
Mr. Murray had 1,000 extra copies of the union journal printed and
distributed at the expense of the CIO. Federal Judge Moore, sitting
in the U.S. District Court for the District of Columbia, lield that the
IMPROPER ACTIVITIES IN THE LABOR FIELD 19887
printing and distribution of the editorial obviously involved an "ex-
penditure in connection with'' a Federal election and therefore vio-
lated section 304. The constitutional issue having been raised, Judge
Moore then had to decide it. He held that the section violated the
first amendment as a clear infringement of the rights of freedom of
speech, of the press, and of association — and dismissed the indict-
ment. On appeal, the Supreme Court affirmed the dismissal, but not
on constitutional grounds. It ruled, instead, that the printing and
distribution of Mr. Murray's editorial did not constitute an expendi-
ture in violation of section 304. After detailed examination of the
wording of the statute and its legislative history, Mr. Justice Reed
concluded for a majority of the Court that the statute was not designed
to reach political endorsements in regularly issued union media of
communication with the membership. Somehow the 1,000 extra copies
were disregarded.
In a dissenting opinion, Mr. Justice Rutledge (and Justices Black,
Douglas, and Murphy with him) accused the majority of "rewriting"
and "emasculating" the statute in order to avoid the constitutional
issue. The dissenters would hold the statute unconstitutional, how-
ever, even as applied by the majority, that is, restricted to election
expenditures not in the normal and regular course of a union's com-
munication with its membership. {United States v. CIO, 335 U.S.
106(1948).
At about the same time, Federal Judge Hincks, sitting in Connecti-
cut, issued one of the most instructive opinions yet handed down con-
cerning the meaning and the constitutionality of section 304. He held
that i\\Q statute prohibited paid political advertisements in newspapers
and on radio when they advocated the defeat of certain delegates to
a national political convention. The case, involving a Painters Union
local which had no regular means of communication with its members,
was distinguishable from the CIO News case in that the expenditure
was not in connection with a regularly issued union journal and in
that the paid promotions were not confined to the union membership,
but reached the general public.
By this decision, Judge Hincks was called upon to decide the con-
stitutional issue. The statute did to some degree infringe upon first
amendment rights, the judge recognized; yet, he observed, it by no
means canceled those rights, but rather left considerable leeway for
the political activity by unions in the form of lobbying, discussion of
issues, abstractly, and so on. On the pther hand, he noted. Congress
has a heavy responsibility to protect the political process in the in-
terest of the vast mass of the general and unorganized electorate, as
against powerful pressure groups avidly seeking their own interests.
(At this point Senator Mundt left the hearing room. )
Dr. Petro. Taking into consideration the fact that trade unions have
been the beneficiary of substantial special privileges and immunities as
a gift from Congress, Judge Hincks observed, a reasonable basis existed
for some restriction on their first amendment rights, and thus, he con-
cluded. Congress method of exercising its duty and power to regulate
the election process did not violate tlie Constitution. {United States
V. Painters Local Union No. m, T9 F. Supp. 516 (D. Conn. 1948).)
On appeal, the second circuit reversed Judge Hincks, just as the
Supreme Court had reversed Judge Moore in the CIO News case —
1
19888 IMPROPER ACTIVITIES IN THE LABOR FIELD ^
not on the constitutional question, but on the question whether the paid!
advertisements involved an "expenditure in connection with'' a Fed-
eral election. Thus, the natural reach of the statute's language wasi
further circumscribed. Speaking for the second circuit, Judgei
Augustus Hand declared that —
* * * an interpretation * * * which would allow expenditures in the case
of a union publication and prohibit them when made by a union through the]
use of an independent newspaiier or radio station seems without logical justi-j
fication.
{United States v. Painters Local Union No, 481. 172 F. 2d 854 (2dj
Cir. 1949).)
A majority of the Supreme Court, in the most recent decision m-<
volving section 304 wliich that Court has handed down, disagreed withi
Judge Hand's logic. It held, in spite of the assertion, that the sectionj
does prohibit an expenditure of general union funds for a telecast advo-
cating the election of certain candidates to Congress. The case camei
to the Supreme Court prior to a trial of the facts, the district judgei
having dismissed the indictment before trial as failing to allege ai
violation of the statute.
Senator CiiuRcii. So that I may follow, did the Judge Hand ease|
go to the Supreme Court ?
Dr. Petro. No. They denied certiorari. I wisli you would noti
hold me on that, because it only runs in my head that they denied]
certiorari. In any event, it did not go to the Supreme Court. ]
Senator Church. It was not passed upon by the Court ? i
Dr. Petro. That is correct. <
^Miile holding that the indictment would, if proved, establisli ai
violation of section 304, the majority, in an opinion written by Justice i
Frankfurter, refused to pass on the constitutional issue. As Justice!
Fran.kfurter put it, and as many will agree, the Court gets into most
of its trouble by passing prematurely upon constitutional issues, and
it would be time enough to pass on that issue when a trial actually
established the facts alleged in the indictment. He went on to say:
that the trial would have to establish, before a violation conld actually
be found, (a) that the telecast was financed from general membership*
funds; (h) that it reached the general public; (c) that it involved
actual electioneering rather than a mere statement of fact or issues ; '
and (d) that it had been sponsored "with the intent to affect the results
of the election" ( United States v. Automohile Workers Union, 352 j
U.S. 567 (1957)).
Justice Douglas, joined by Cliief Justice Warren and Justice Black,
took the position that the' dismissal of the indictment should have i
been affirmed. His desire, apparently, was to construe the statute out \
of existence; for otherwise, in his opinion, it would have to be held.i
unconstitutional. According to Justice Douglas, Justice Frank- 1
furter's insistence on the establishment of the four facts listed above ji
could make no difference insofar as constitutional validity was con-j
cerned. Justice Douglas summarized his conclusions in these words:'
The Act, as construed and applied, is a broadside assault on the freedom of
political expression guaranteed by the first amendiiieiit. It cannot possibly be I
saved by any of the facts con.iured'up by the Tourt. The answers to the questions i
reserved are quite irrelevant to the constitutional questions tendered under the.j
first amendment.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19889
The last docisioii wortli notii^.g; involA^ed grassroots political activity
on union time by three salaried union agents in Ijehalf of the local
union president, who was running for Congress. The three agents
did such things as ring doorbells, urging registration, and transport
voters to the polls. Dismissing the indictment, Federal Judge Dun-
can, sitting in Missouri, simply said that he did not believe section 304
could be so far-reaching.
If this case involved an illegal expenditure-
He said —
then any political activity of any person on the payroll of a labor organization
from its president to its janitor, would render that union and its principal oflB-
cers liable, if such persons devoted any appreciable time in support of, or in
opposition to, any candidate (for Federal office). (United States v. Construc-
tion ct General Laborers Local Union No. 26-i, 101 F. Supp. 869 (W.D. Mo. 19.51).)
There has been no decision of the Supreme Court since then under
section 304 or 610.
These are the cases, and the problems posed are clearly defined by
these cases. The basic issues emerge most vividly.
The decisions and opinions liolding section 304 unconstitutional have
brought into sharp focus the fact that political activity is an essential
part of the public life of any representative government and that
legislative restriction of such activity will always run into consider-
able difllculty on constitutional grounds. The decisions which avoid
the constitutional issue, and the single decisioji squarely upholding the
constitutionality of the statute liave emphasized the weight of the
duty which rests upon Congress to prevent abuse of the elective proc-
ess, and the dangers to that process which large and powerful pressure
groups pose.
Tlie tension between these opposing considerations has produced
two significant results. In the first place, the statute has had virtually
no effect. It has been restrictively interpreted. Each of the cases re-
viewed has beyond much question literally involved a union "expendi-
ture in connection with" an election to Federal office, but in not a single
one has tliere been a conviction. Although unions are probably the
most active political organizations in the country today, there have
been only a handful of prosecutions under section 304.
Section 304 seems to be the statute that you cannot violate even if
you tried.
In the second place, there has been an inordinate delay in resolving
the constitutional issue, and this suggests that the Supreme Court is
greatly disturbed on the question. Three of the present Justices have
already clearly indicated that they will hold the statute unconstitu-
tional unless it is construed into impotency. Not one of the Justices
has yet committed himself to the view that the statute is constitu-
tional, even when interpreted as restrictively as it has been.
The Chairman. If they should hold that, then there would be no
w^ay on earth for the Congress to restrict or limit or, in other words,
in any other way regulate political contributions from a labor organi-
zation or a corporation.
Dr. Petro. I believe. Senator, you have put your finger precisely
on the reason for the Supreme Court's present position of frustration.
They don't want to decide the case either way.
19890 IMPROPER ACTIVITIES IN THE LABOR FIELD \
Senator Church. May I ask you this, as an authority in this field : -J
Do you not think that part of the Court's doubt centers on the sweep
of the language that undertakes to prohibit contributions for activi- '
ties "in connection with any election"? .;
This is very sweeping language that might proscribe a great many \
perfectly legitimate acts that are the necessary prerogative of f ree '
citizenry. ^
Dr. Petro. Precisely. i
(At this point Senator McClellan left the hearing room.) ^
Senator Church. Whereas a section that is more limited in its at-
tempts to establish the illegal act, for example, a section that might
specifically limit contributions to the campaign funds of any candi-
date for office, might not raise these serious questions of constitution-
ality. -:
Dr. Petro. I believe there is little doubt that the Court would 1
speedily uphold the constitutionality of a statute that was limited to ;
a restriction upon political contributions. There is not the slightest j
question about that. The only trouble is that the current legislation '
grew out of dissatisfaction with such a statute.
Senator Church. Prior to the time that this section was adopted, |
we did have a statute that prohibited union contributions, politicals
contributions, either by unions or by corporations to Federal elections, i
Dr. Petro. Yes.
Senator Church. Thank you. That clarifies that question for me, j
Dr. Petro. I have said that not one of the Justices has yet com-i
mitted himself to the view that the statute is constitutional, even when j
interpreted as restrictively as it has been. The conclusion indicated is |
that the statute, or any other legislation seeking the same objective, |
will survive only in a highly restricted or in a completely impotent i
form. In either case there is no likelihood that it w411 serve to reduce !
significantly the dimensions of the problems as conceived by many'
posed by the prodigious political activities of the large unions.
I do not know if the committee is interested in my idea on how thisj
problem should be solved, what the way out of the dilemma is, in my^
opinion. Since I am here, though, and since I have ideas about thoj
subject, I have included them in my statement.
I propose that there is a sound principle which, if enforced, wilP
take us out of the dilemma.
In the one opinion squarely upholding the constitutionality of sec-s
tion 304, Judge Hincks acknowledged that Congress could have|
handled the problems posed by excessive union political activity in a^
manner other than the one it adopted in the Taft-Hartley Act. Thej
Congress could have met the problem — I
by a major curtailment of the economic power of labor organizations withoutj
at all trenching upon their freedoms — j
and if Congress had but withdrawn the special privileges and im-i
munities which it had granted to unions, according to Judge Hincks,|
they, the unions, would not have enough power to raise much of aj
problem. But, he went on to say : ■)
Congress deemed it preferable to make no major reduction in the economicl
power of labor organizations, believing, apparently, that their continued power^
in the economic field would be of public benefit and not necessarily a source of I
danger if not supplemented by imrestricted political power as well * * * i holdj
IMPROPER ACTIVITIES IN THE LABOR FIELD 19891
the act not invalid because of its incidental restriction on the political activities
of aggregations which owe their strength to special privileges and immunities
conferred upon them for their discharge of a public economic function. United
States V. Painters Local Union No. ^81, 79 F. Supp. 516.
If the political activities of labor unions were properly a cause of
concern in 1947, when the Taft-Hartley Act was passed, it goes with-
out saying that we must be close to a condition of crisis at present.
The political power and activity of unions was substantial then; m
comparison, it is colossal now. The Taft-Hartley restriction of po-
litical contributions and expenditures has obviously had no effect at
all. What then is to be done ?
(At this point Senator McClellan returned to the hearing room.)
The experience of the last 12 years indicates that Congress made a
mistake in attempting to curtail the political power of unions while
leaving their economic power, based on special privileges and immuni-
tie.s, alone. The mistake is not surprising when one realizes that
Congress a<jted, and to my knowledge continues to act, on an invalid
premise. Judge Hincks pointed out that Congress continued the spe-
cial privileges of unions on the theory that unions were virtually an
arm of government, discharging a "public economic fmiction." What
the judge had in mind was the prevailing assumption that by raising
wages through collective action unions were in effect public servants.
Economists and the public generally have come a long way from that
point of view. More and more persons in all walks of life are begin-
ning to appreciate that far from serving a public function in their
constant pressures for higher wages, unions are simply another special-
interest group, selfishly concerned with increasing their share of the
national income, regardless of the consequences to the public welfare.
The outstanding economists of this country today are firmly of the
conviction that the economic pressures of unions do not serve even
the interests of all working men and women, let alone the general
public interests of consumers, retired persons, and others on fixed
incomes.
I refer the committee to a most interesting book, entitled "The
Public Stake in Union Power," published by the University of Vir-
ginia Press in 1959. This book contains a group of essays by what
I believe to be the outstanding economists of this country today. They
are in agreement in support of the statement I have just made con-
corning the role of unions in society.
This being true, and it also being true that the method of direct
prohibition of political activity by unions has proved a failure, it
would seem that the only promising alternative is for Congress to
reconsider its assumptions concerning the role of unions and the de-
cision it made in 1947. Elimination of the special privileges and
immunities is that the situation demands ; with that will come a reduc-
tion in union power.
Under no circumstances should unions be burdened with restrictions
which other private associations do not bear. To impose such re-
strictions is both undesirable and unnecessary. The principle of equal
application of all laws is too important to the life of society to justify
abandonment under almost any conceivable conditions. Certainly
the current conditions, bad as they may be, do not call for an abandon-
ment of that principle. As a matter of fact, our present troubles can
be traced, not only in labor relations, but in the whole area of domestic
19892 IMPROPER ACTIVITIES IN THE LABOR FIELD :|
i
economy as well, to the wholesale abandonment of tht principle which :
has occurred in recent years. \
There is every reason to believe that the political and other dangers -\
which the large unions pose will be substantially reduced if the special 1
privileges of compulsion are removed — and if the removal is designed I
in an effective way. Specitically, all stranger picketing and other {
boycotts and all forms of compulsory imionism contracts would be i
prohibited; for they give unions a special privilege to restrain and ■
coerce employees in the exercise of the basic right, recognized in '^
Federal and State law, not to join unions. But a mere paper pro- ':
hibition will not be enough. The experience of the last 12 years, under i
the Taft-Hartley Act, demonstrates that direct access to all courts, i
especially for immediate injunctive relief from the irreparable injury ;
of unlawful union action, will have to be provided, if the strictures ;
upon union compusion are to be effective. In order to accomplish this, ]
it will be necessary to repeal the Norris-LaGuardia Act, abolish the i
National Labor Relations Board, and specifically overrule the Supreme ]
Court's preemption doctrine. ;
I am aware that these proposals are widely considered to be radical
and most people think they have no chance in the current political !
conditions in the Nation. To say that they are radical, however, is ,
simply an error in understanding and in perspective.
It should be remembered that we are faced with a seriously tlireat- \
ening condition, one which this select committee deserves a great deal ■
of credit for working so hard to uncover. It should be also remem- I
bered that in a longer perspective the proposals advanced here are }
neither as momentous nor as "radical" as the subjects to which they j
are addressed. The Norris-LaGuardia Act, the National Labor Rela- \
tions Board, and the preemption doctrine were, when they were intro- ■>.
duced not very long ago, not only more "radical" but revolutionary ;
innovations. They have worked very badly. We are suffering the \
consequences now. '
(At this point Senator Ervin returned to the hearing room.)
Dr. Petro. The candid intention cf these proposals is to create con- i
ditions in which unions will be in fact the voluntary associations ]
which they now incorrectly claim to be. Wlien they are volimtary \
associations they should have the right, shared with all other volun- j
tary associations, to run their internal affairs and to spend their money '
as they please, subject only to the general law prohibiting violence, ,
coercion, fraud, and thievery. At present unions are in a position to ]
spend funds for political purposes and objectives opposed by some of l
the very members who contributed those funds. Worse than that, a
man may be forced into a union by coercive organizing devices, kept
there by a specially privileged compulsory unionism agreement, and
be forced to pay dues which are spent for purposes in which he has no j
interest and to which indeed he may be more or less vigorously t
opposed. j
The present situation is one largely created by Congress, and only j
Congress can repair it. Confused and contradictory efforts have j
brought Congress to a frustrating impasse. On the one hand, by
according trade unions special privileges. Congress has allowed them
to become an enormous threat to the economic, social, and political life
of the Nation. On the other, it has tried to remove the political
IMPROPER ACTIVITIES IN THE LABOR FIELD 19893
tlireat by legislation which threatens first ainendment rights and thus
has had considerable trouble in the courts. Principles vital to the life
of the Nation are being mangled on both sides. The only wholesome
solution is to restore the principle of equality under the law by with-
drawing the special privileges which unions now have, and to eschew
all the restrictions which now exist upon political contributions and
expenditures. Neither those special privileges nor the restrictions
upon political expenditures have a proper place in a free country
whose central political institution is representative government.
Moreover, they create the kind of trouble which ensues always upon
the abandonment of any sound principle. For what makes a principle
sound is that it works.
In conclusion, I should like to emphasize that I am greatly disturbed
by the present character and scope of political activity by unions as
any man. Yet I do not believe that direct controls are either sound in
principle or that they will work. In precisely the same way that price
controls and rationing are no sound answer to the problems of short-
ages and inflation, direct controls upon the political activity and ex-
penditures of unions or any other group will not remove the causes of
present concern.
The history of the present legislation, at any rate, proves that the
approach I have suggested is the only effective approax^h around today.
Thank you.
Senator Curtis. Mr. Chairman.
The Chairman. Thank you. Doctor.
Senator Curtis?
Senator Curtis. Dr. Petro, Avhat laws would you repeal in order to
eliminate the special privileges and immunities of unions?
Dr. Petro. You embarass me somewhat, Senator, because as a mat-
ter of fact, I am content to leave a few special privileges around,
because I think they are not harmful, and that, indeed, they may be
establishing an idea of great worth to a country which prides itself
'upon being free. I have made this little speech because if all the
special privileges of trade unions were to be removed, then a thorough-
going repeal of the National Labor Relations Act would be necessary-.
Senator Curtis. But those that you would repeal, what laws would
you have repealed ?
Dr. Petro. For present purposes, to meet the critical need that now
exists, I think the first law I would repeal would be the Norris-La
Guardia Act. This, although not very widely understood, provides
the important special privilege which unions possess, the privilege
to be free of effective relief against their unlaw-iul conduct.
The Chairman. By court action, do you mean
Dr. Petro. There is no other effective relief.
The Chairman. That is what I say. They are immune from the
same processes and means of seeking relief that can be applied against
others.
Dr. Petro. Everyone else in the country is subject to injunctive re-
lief if he inflicts irreparable injury by unlawful conduct, every one
but trade unions.
The Chairman. Excuse my interruption. Senator Curtis.
Senator Curtis. That is allVight.
The Chairman. Are there further questions ?
19894 IMPROPER ACTIVITIES IN THE LABOR FIELD
J
Dr. Petro. The National Labor Relations Board needs abolition, i
needs it very badly. |
The Chairman. Needs what? i
Dr. Petro. Abolition. It has done a very bad job, I believe, in con- :
struing existing legislation. But even if it had done a good job in j
the technical construction of legislation, it should be abolished any- .:
way, because it should never have been created in the first place. I ^
genuinely believe that quasi-judicial administrative tribunals are ^
fundamentally unconstitutional. The judicial power of the United
States belongs to the U.S. courts, not to administrative tribunals. ■
More than that, you see, no administrative tribunal is equipped to pro- «
vide effective relief against even the most grievous kinds of injury, i
This is because we are hypocrites about the Constitution to a certain i
extent ; we are not thoroughgoing hypocrites. We have created these !
administrative agencies contrary to the Constitution, but we have ■
drawn the line at giving them complete judicial powers, injunctive I
powers, and the power to award damages. As a consequence of our
fragmentary hypocrisy, we have made the situation worse.
Senator Curtis. What would you have to repeal to abolish compul- 1
sory unionism ? ;
Dr. Petro. It is necessary, in order to abolish compulsory union- ;
ism, only to delete certain qualifying language from the National i
Labor Relations Act, section 8(a) (3), which is an excellent way of 1
demonstrating, I suppose, that compulsory unionism amounts to a
special privilege. The general prohibition against either prounion or i
antiunion discrimination in the National Labor Relations Act, would, :
if unqualified, prohibit all forms of compulsory unionism. Therefore, j
in order to preserve the phases of compulsory unionism which the \
Taft-Hartley Act does preserve, there is a qualification added to \
section 8 ( a ) ( 3 ) , a long proviso. \
Senator Curtis. Which creates the union shop ?
Dr. Petro. Precisely. It is necessary only to withdraw or repeal ]
that qualification, that proviso. '
Senator Ervin. Or if you cut off the last part of section 7?
Dr. Petro. You would have to do that, too, sort of a cleanup opera- i
tion. The same qualification is in section 7. j
Senator Curtis. Do you approve the principle of economic sane- i
tions as a method of controlling abuse of union power ?
Dr. Pedro. That expression is a little broad, Senator. I think I .
know what you mean, though, such things as boycotts, secondary, ;
primary, picketing, and so on.
We get into the same kind of a problem that was raised to some^
degree this morning. It depends on who is using the terminology, j
Do you remember when you were talking about pressures this morn- 1
ing? Pressures and sanctions tend to cover the same ground and
have the same ambiguity. The starting point for analysis, though, i
must be the fact that the Taft-Hartley Act unqualifiedly prohibits
every form of economic coercion by employers in labor relations. As '
matters stand, it does the same for unions. Insofar as it is addressed
to unions the National Labor Relations Board has never enforced it. ]
Therefore, some of the most effective forms of economic coercion, i
forms which fall squarely within the prohibition of the statute, have ,
not been held to be unfair labor practices. '
IMPROPER ACTIVITIES IN THE LABOR FIELD 19895
Senator Curtis. I have a couple of questions that Senator Gold-
water wanted me to ask.
Has welfare state government assumed so many fields in which to
legislate that ti has so many laws to administer that it administers
the laws badly ?
Dr. Petko. I feel that this, of course, is the root of all the prob-
lems we face in this country. I do not know whether itis true that
one acquires a sense of a relationship with the Divinity when he gets
elected to Federal office, but unless one is in very close contact with the
Divinity, he is obviously incapable of doing all the things that are
expected of you people in Congress.
Senator Ervin. They do not get any connection with the Divinity,
riiey do very directly fall victim of a disease known as Potomac
fever, which exhibits itself in this way : As soon as they get to Wash-
ington, they come to the conclusion that the people that sent them
here do not have sense enough to manage their own afi'airs, so they
immediately start passing laws or advocating laws to take away the
right of government from those who have elected them to come to
Washington.
Dr. Petro. There really isn't anything very ideological involved
here, I believe. It is a matter pretty much of commonsense and com-
mon observation. No 600 men can do all the things that roughly 600
Senators and Representatives try to do.
Senator Church. That is why we have set up these quasi-judicial
agencies.
Dr. Petro. This only aggravates the problem, but does not solve
them.
Senator Church. Whether or not the problems have been solved,
that was one of the reasons for their creation.
Senator Curtis. Then investing the judicial authority in the courts,
you would, in general, make that concurrent in the State and Federal
courts, would you not ?
Dr. Petro. Yes ; again on the theory that that is the best and most
workable system. We have a single court in these United Sta^^es, the
Supreme Court of the United States. On matters involving Federal
law, this is the tribunal which can reconcile all differences in interpre-
l;ation in the courts below. Indeed, if I don't sound too professorial
about it, I might remind you that this was the understanding of the
framers of the Constitution, that Federal laws would be to a consider-
Eible extent enforced by State courts, with the Supreme Court standing
as a court of ultimate review to see that they went along in a pretty
uniform way.
It doesn't make any sense to deny oneself of any route of law en-
forcement. This is the horrible trouble with the preemption doctrine,
an arbitrary exclusion of judicial help in a field where it is very sadly
needed. Meanwhile we find the National Labor Relations Board inun-
dated with cases. What is the sense of this ? Are we in favor of ob-
structionism ? Surely our progressive Supreme Court is not in favor
of obstructionism, is it, in terms of law enforcement ?
Senator Curtis. That is all I have, Mr. Chairman.
The Chairman. Senator Church.
Senator Church. Doctor, looking to the section 610, if I understand
your testimony correctly, there are a number of things that are wrong
19896 IMPROPER ACTIVITIES IN THE LABOR FIELD "?
with it. First of all, it attempts too broad a prohibition in the Ian-:
guage in connection with any election, or in connection with any pri-j
mary election, political convention, or caucus, that it has been con-^
strued in the few cases that have been brought to the courts so nar-JJ
rowly as to be largely emptied of any meaning. That is one problem^
Secondly, if it were not so construed, there is much evidence that the^
courts will hold it unconstitutional if it comes right down to it as inter-
fering with the basic freedoms of citizenry, ^^
Dr. Petro. And only that they should. }
Senator Church. And in your opinion that is an unconstitutionall
provision if it comes to the final test ?
Dr. Petro. Yes.
(At this point Senator Curtis left the hearing room. ) ]
Senator Church. Would you advocate that this section be re-j
pealed? You have said that you would advocate the repeal of thisi
section. My question is: Would you then reinstate the old provision i
of the law which prohibited actual donations to the campaign funds |
of candidates by unions or by corporations ? j
Dr. Petro. In my opinion, the Congress should not have any law i
regulating ])olitical activity which goes beyond the category of what'
lawyers call the things molmn in se, fraud, corruption, cheating, brib- !
ei-y as defined in the law, and so on.
I say this not because I think even such restrictions can work, or-
at least work completely, but I say it only because they have somej
chance of working consistently with fundamental political institu-i
tions, while no other restrictions, at least tliat I can think of, havej
the remotest chance of operating well.
Senator Church. Evidently the history that you have related to 1
us indicates that this section has had no effectiveness. However, i
barring such major revisions of basic law as you have advocated to -
strike at what you call the special privileges and immunities of labor i
unions. It seems to me it would be unwise for us to strike from the j
law all provisions that represent an attempt by the Congress to pre- i
vent unwarranted political activity by labor unions and corporations.
I think that a restriction that is directed toward contributions to^
political campaigns is enforcible, and probably is in accord Avith the
public interest in that the use of union dues or the use of corporate i
money for this purpose is wrong if it is not contributed by the unaer-
lymg membership for that purpose.
In other words, I think that there is a difference between voluntary
money used for i)olitical purposes, and dues money used for political
purposes, and that a law tliat undertakes to prohibit unions or corpo-
rations from using dues money or corporate funds for political con- '■
tributions is enforcible, and ought not to be stricken from the statute
books.
Dr. Petro. I happen to disagree. I think it is neither desirable
nor enforcible. Furthermore, I do not think that after considerable •
searching thought on the subject, it is quite accurate to say that the ;
problem in respect of unions is the same as the problem in respect of
corporations. The corporate investor is not the analogue of the union
member. The corporate investor has market alternatives, freely and
readily available to him, which the union member does not.' The
corporate investor has no love, no interest, no emotional attachments
IMPROPER ACTIVITIES IN THE LABOR FIELD 19897
to a share of stock, normally, while the workiiigmaii has all sorts of
ties, emotional and economic, with the particular job that he has.
Therefore, there is a much i^reater coercion upon the union member
than there is upon the corporate investor. Quite apart from that
Senator Church. Well, I think that is so, but I do not think that
that ii:oes to the point involved here. Of course, there is a lot of diti'er-
ence between the stock investor and the union member, but I think
the public question that is involved here is whether any organization
ought to use money that is either corporate money or dues money for
political contributions.
Dr. Petro. That is the heart of the problem, Senator, that is right.
Senator Church. That is the heart of the problem. I think that
this kind of prohibition is in the public interest. Your position is
that you would strike even that restriction from the statute books,
and eliminate any restriction at all other than the acts that are molum
in se ?
Dr. Petro. Yes, because you see if you dig as deeply as you have
been digging, you get to the point that I think was reached this morn-
ing. You realize that most political parties are private, voluntary
organizations, and there is not the slightest reason in the basic jjrin-
ciples of our system, for giving them any privileges which trade
unions or businesses, medical associations, or bar associations, do not
have.
Furthermore, I think you negate the basic principle in that we are
a political system. That is what democracy, representative govern-
ment, is. It is all politics. Every European who comes to this coun-
try sees immediately, since Montague, that it is most of our life. To
start putting restrictions which I think I have demonstrated to be
arbitrai-y upon this process is certainly to lead to results inconsistent
with the basic drive of our system. I do not think there is anything
inconsistent with the public interest in any voluntary association en-
gaging in as much nonviolent and nonfraudulent political activity as
its membership wanted.
Senator Church. We will get into a philosophical argument liere,
because I can see very large corporations with hundreds of thousands
of stockliolders whose purpose of investments is to make 5 or 6 per-
cent, who are very little concerned w^ith the political questions that
may concern the management. The management, having use and con-
trol over large amounts of corporate funds, turning tliose funds to
political ends, may not accord with the sentiments of a broad ma-
jority of the stockholders. Yet at the same time, the stockholders
paying little heed to how this money is being used for political pur-
poses so long as they are realizing 5 or 6 percent on their investments.
At the same time I see serious questions where large unions are con-
cerned, w^here those unions use dues money for political purposes
which may not accord with the majority view of the membership. So
I do think that restrictions as to the use of compulsory funds are ap-
propriate and ought not to be stricken from the statute books. But
you have expreSvSed your view and expressed it very well. It is not
my purpose to delay the committee as we dispute this point. I think
your testimony is extremely interesting and valuable. I am glad to
have it.
The Chairman. Are there any questions ?
19898 IMPROPER ACTIVITIES IN THE LABOR FIELD I
Senator Ervin. I want to say that I share the view you expressed"
about the abolition of the National Labor Relations Board. ;
Dr. Petro. That is two of us. ;
Senator Ervin. I wish there were more down here, because I think
that would be the solution to a large part of the problem of coercion,i
both on the part of management and on the part of labor. I think;
you could pretty nearly eliminate it. i
Dr. Petro. Among other reasons for the creation of these admin-'
istrative tribunals was the assumption that they would do an effective]
job very swiftly. Of course, nothing emerges more clearly from rec-l
ords of the National Labor Relations Board, and I might add thei
Federal Trade Commission, than their dilatory and ineffective ef-!
forts. It turns out, in fact, that the old courts, which all the great ■
progressives and lliberals think were such stick-in-the-muds, are still]
consistent with legal principles the best source of swift and just
remedies available. i
Senator Ervin. I think if we abolish the National Labor Relations^
Board and set up an agency to handle routine matters, like supervis-!
ing elections and things of that kind, in the Department of Labor,'^
and then gave jurisdiction to enforce unfair labor practices to the:
courts, both Federal and State, give them concurrent jurisdiction, we '
would have every reason to think that many of these evils would i
vanish.
Dr. Petro. On this I would agree that it is fair to talk both about J
management and union coercion. There is a lot of delay in getting -^
relief from management coercion, too.
Senator Ervin. For example, we found out in investigation last!
fall where for this little trucker who had, I think, seven employees,^
Mr. Coft'ey, it took from January to April before they could count the ;
ballots. If they had counted the ballots in the first instance, they ]
would have found out that even if the points they were making — that I
certain ones were illegal— would not have made any difference'
anyway. ;
Dr. Petro. Or if in the meantime the destructive boycott has been :
enjoined, in an ordinary interlocutory equitable relief. i
Senator Ervin. I have in times past given a certain amount of what :
I thought was correct or proper respect to the Norris-La Guardia !
Act. But a short time ago I took it up and studied it more fully than '■.
I have ever done so in my life. I came to this conclusion, and I would j
like to know if you share it : In the first place, the Norris-La Guardia i
Act, by providing very severe limitations on situations in which even i
an injunction can be procured in any case, makes such a severe limi-
tation on the power to seek an injunction that it is almost impossible
for any person to qualify for an injunction in time to make the in-
junction of any use to him.
In other words, he almost has to stand by and see the irreparable
m]ury which he fears inflicted upon him before he can get relief, and
then it is too late. ■
Dr. Petro. I believe. Senator, that every disinterested student of j
the field would agree that the Norris-LaGuardia Act has made |
equitable relief in labor disputes in the Federal courts completely I
worthless. Furthermore, I think a large number of students of the '
law would agree that the Norris Act makes equitable relief available |
IMPROPER ACTIVITIES IN THE LABOR FIELD 19899
in the Federal courts only in cases where violence amounting to civil
insurrection has already occurred.
Senator Ervin. That is the way I diagnosed it.
Dr. Petro. Violence which the police are unable to cope with, is the
language of the act, and, of course, I guess that is how you define
insurrection.
Senator Ervin. In other words, it has to appear that the authorities
charged with preserving the peace are incapable of doing so. Ordi-
narily, the only way you can prove that is to have it happen.
Dr. Petro. That is correct.
Senator Ervin. It seems to me that it is a terrible thing when the
Government, itself, denies people the benefit, denies people in a se-
lected class of cases a remedy which is available in all other classes of
cases of a similar nature, and denies the only remedy which is effective
at all. It is sort of like nailing the door of the courthouse shut.
Dr. Petro. Yes. And this, of course, is the ultimate negation of
good government, not to provide people with a remedy for unlawful
harm they have suffered.
Senator Ervin, I will agree with that. I have the feeling that if
any function of government is more sacred than another, it is the
function of administering justice.
Dr. Petro. That is correct.
Senator Ervin. Now, with reference to the preemption doctrine, I
have never been able to find anything in the Constitution which justi-
fies striking down a State law under the theory of preemption where
the State law is in a field where both the Federal Government and
the State are authorized to legislate, unless the State law is incon-
sistent with the Federal Government.
Dr. Petro. I believe, Senator, that if you search from now until
doomsday you will never find the provision permitting the Supreme
Court to strike down State laws consistent with Federal legislation.
Senator Ervin. Yet, we have a doctrine of preemption in the labor
field and also the subversive field in which a State statute has been
struck down on the doctrine of preemption, notwithstanding the fact
that the statutes are perfectly consistent and notwithstanding the fact
that the Federal statute cannot be claimed in any absolute sense to oc-
cupy the entire field.
Dr. Petro. This is a very, very disturbing line of decisions, this
preemption line. It has occupied a great deal of my home time in
research.
Senator Ervin. I have been struck, going back in connection with
the so-called Smith bill, H.R. 8, which Senator McClellan introduced
in the Senate, that all the old decisions are to the effect that Federal
law never invalidates a State law unless there is an express declaration
to that effect, or that they are so inconsistent that they cannot stand
together. This preemption doctrine of recent years is absolutely
contrary to all words of the Constitution itself.
Dr. Petro. Yes. I believe I called it both new and revolutionary
in my statement. Therefore, I agree with you.
Senator Ervin. Is it not true that one of the inadequacies or one
of the things that brings about this condition in which people are
denied remedies is the provision of the Taft-Hartley Act restricting
the right to seek injunctions I
19900 IMPROPER ACTIVITIES IN THE LABOR FIELD i
Dr. Petro. If only this were more widely known, we would be in ;
much better condition, I believe, but that is the trouble. The sources
of the current critical problems are so deeply hidden in devious legis- :
lation. !
Senator Ervin. I would like to say that you have rendered a signal
service to the country in your writings.
I have just completed reading your very excellent treatise on the
subject of how the national Labor Relations Board has nullified the ■
Taft-Hartley Act. I think the points you make in there are inescap- :
ably true. At least that is the way it strikes me.
l3r. Petro. I guess we are both old-fashioned lawyers and that '
is why we are in so much agreement. ;
Senator Ervix. I was observing at lunch today, when they were ^
talking about a certain Senator's views. I said, "The trouble with ;
those views is that they are just too sound for this generation." '
Thank you, sir.
The Chairman. Thank you very much, Doctor. i
I read your book, "Power Unlimited," and I gave out some com- I
ments about it. .1
Dr. Petro. Yes. The publisher was considering whether or not ;
you desei-ved a slice of the royalties.
The Chairman. Thank you vei:y much. I read it with great inter- j
est. I think its pronouncements are very profound in many respects. !
Thank you veiy much. ^
Dr. Petro. Thank you for inviting me. ;
The Chairman. Dr. Hacker, will you come forward, please ?
You do solemnly swear that the evidence you shall give before this j
Senate select committee will be the truth, the whole truth, and nothing ]
but the truth, so help you God ? i
Mr. Hacker. I do. j
TESTIMONY OF ANDREW HACKER ^^
The Chairman. We will have to take a moment's recess to go to :
the floor and vote. !
(Brief recess.)
(Members of the select committee present at the taking of the re- ;
cess : Senators McClellan, Church, and Ervin.)
(Members of the select committee present at the reconvening of the I
session: Senators McClellan and Ervin.) \
The Chairman. The committee will resume. "^^
All right. Dr. Hacker, you have been sworn. Will you give us your j
name, your background, please, sir ? [
Mr. Hacker. My name is Andrew Hacker. I am an assistant pro-
fessor of government at Cornell University, in Ithaca, N.Y. One of
my academic research interests is the American corporation. I have |
been engaged in this for almost 3 years. I have been asked to speak '[
today on some aspects of political activities and spending by corpora-
tions and labor unions.
As I told Mr, Adlerman, I was not competent to speak on trade
unions, but I could offer some comments and perhaps some sugges-
tions concerning corporations; so, Mr. Chairman, I will confine my
remarks to corporations.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19901
The Chairman. All right, Doctor; we will be very glad to have
that. We will also have testimony regarding the labor organizations
with respect to political spending. If you feel you can testify and
be helpful to us on the other side of the coin, the corporation spend-
ing in politics, we will be very glad to have it.
Mr. Hacker. Thank you, sir.
I will just speak from some notes I haAe. I hope to keep it very
short.
The Chairman. If you do not have a prepared statement, you may
us(^ your notes.
Mr. Hacker. First of all, I would say that corporations in this
country have always been active in politics and in an entirely legiti-
mate way. I am sure there is not a Congressman in Washington who
has not at one time or another received a telephone call from a repre-
sentative of a corporation who has discussed the interests of that cor-
poration in relation to current legislation. And I am sure that this
has always been regarded as a proper activity of corporations in
America. Certainly, this is not improper.
I think one of the reasons 1 was asked to come here, however, is
that 1 have been engaging in some study and writing about recent
changes in corporations' mood and approach in politics. I think
that among more and more corporations — and I have a great deal of
evidence for this — there has been a tendency to begin to get into poli-
tics in an open, planned way.
In other words, in my ofiice at Cornell University, I have almost
two dozen speeches by presidents of large corporations in which they
talk about the ways in which their companies are going to get into
politics, that this entry into politics is very important, and so forth.
I am not going to go into the reasons which are given for this.
Some of them are well thought out ; some of them are rather frivolous.
Some are easy to understand ; some are more difficult to grasp.
For example, I have a pamphlet from one corporation which, in
effect, says that, "It is time for our people to get into politics because
we now have a labor-dominated Congi-ess in Washington." I think
this may be effective as a battle cry. But in my own opinion. Sena-
tors, I do not consider the current Congress as being labor dominated,
although some people may sincerely believe this.
Another reason for corporations wanting to get into politics, I
think, is a more serious one; and this is one that I think all of us
will have to do a lot of hard thinking about.
The Citatr:max. May I interrupt briefly at this point ?
Do you think it would be well for the country, a healthy situation
in our democracy, for labor organizations to dominate the Congress?
Mr. Hacker. Certainly not, sir.
The Chairman. And the converee is true with respect to corpora-
tions?
Mr. Hacker. That is right, sir.
The Chairman. I agree with you. I do not think any one interest,
whether it is a major interest, a minor interest, or a combination of
int-erests, should dominate the legislative body of our Govermnent.
I think the legislators, individually and collectively, should be
responsive in a way to the sentiment of our people. I do not mean
by that that they should necessarily sacrifice prhiciple when there is
19902 IMPROPER ACTIVITIES IN THE LABOR FIELD
a momentary, popular wave of sentiment. But I mean that which
is based upon conviction and fundamental principle associated with i
our way of life, yes.
However, I think it would be tragic for organized labor or organ- *
ized tinance or organized anything, as such, ever gets control that it
can dommate the legislative policies, the legislation or the govern-
mental policies, of our country.
Mr. Hacker. I agree with this. Senator. I do not think there is .
much of a chance of this happening. But I do think that we will hear ^
a great deal of political rhetoric from one side talking about the po- ^,
htical dommation of the other, and the other side talking about the \
political domination of the one.
But this, I think, we can take in our stride, the rhetoric, that is. :
I think, furthermore— and here I am speaking as an academic political I
scientist, even a political theorist— there has been an important change '
m corporate thinking in this country. Since the end of the war '
there has even been, you might say, the development of a corporate
philosophy. ■
Books have been written about this. You can read the speeches of '
top executives. You can look at the sort of talk that goes on in the
classrooms of the more sophisticated business schools. You will see j
that more and more of our corporate spokesmen are beginning to talk ]
about their broad social— and now political— responsibilities. I
In other words, even though businessmen do not want to dominate '
the Government— for I think that is the last thing in their minds— I ^
think they are beginning to feel that they have an obligation— and I
say this advisedly— not unlike that of the English aristocracy in the
18th and 19th centuries, an obligation to use their power and influence
for the well-being of society as a whole.
The Chairman. Do you think they feel they must do that some-
what in self-defense in view of the power that is being asserted and
exercised by labor or allegedly being exercised and asserted by labor ? i
Mr. Hacker. I agree. Senator; but I think it is more than this.
Perhaps I am just speculating out loud with you, but I think that the i
gentlemen who run our large corporations are beginning to think of I
themselves as— what shall 1 say ?— statesmen of our society ; that they •
have an obligation to education, to urban renewal, to juvenile delin- !
quency, to a whole range of questions. h
The Chairman. In other words, they are more wholesomely moti-
vated than putting it upon a challenge from executive sources? i
Mr. Hacker. I believe so ; yes, sir.
The Chairman. In other words, they feel they owe something to
their country and they ought to contribute.
Mr. Hacker. I think in this way : It is the old axiom that power '
has Its responsibilities. These m.en are beginning to sense the power '
of the corporation. Mind you, this is in many ways not the lan-
guage of the 20th century, but it iroes back to the 14tli and 15th cen- '.
tunes. It IS the idea that a corporation is— take this advisedly— kind
of a feudal barony in a larger society and it has social responsibilities
to carry out.
As I say, this is all very vague and just beginning to take form in
our own time. The question is, first of all : How do businessmen go
about exercising their social and political obligations? One of the
IMPROPER ACTIVITIES IN THE LABOR FIELD 19903
ways in which this is done, and I think entirely legitimate, is to en-
courage corporation employees to participate more actively with local
political parties.
I will not go into this in detail now, but a number of corporations
have set up "managers of public aifairs" and "offices of civic alfairs,"
where several things are done. One is to encourage businessmen in
these companies to rim for local office, to identify with local parties,
and to become active. I think part of this, Senator, is a response to
labor pressure, but I think part of it has the broader motivation that
I have just talked about.
For example, there is one very large company in this country which
has directed all 153 of its branch managers, who reside in 153 congres-
sional districts, to get in touch with their local Congressmen and Sen-
ators in those States, to keep records on how the Congressmen voted,
and to generally, you might say, act as grassroots spokesmen so far as
the interests of the corporation is concerned.
All that I will say here is that company resources are being used
politically in a greater and greater way. By resources, I mean the
money and the time of various executives expended for political pur-
poses. The goals, however — and I will come to this in a minute —
are not the election of particular candidates so much as they are aimed
at influencing the course of legislation. The corporations themselves —
and I have talked with quite a few corporate executives about this —
are coming to take "official" political positions on legislation.
It is my suggestion. Senators, that this committee has perhaps lim-
ited itself, and indeed, the entire Congress has restricted itself, when
it confines its attention to the support of particular candidates.
In other words, the provisions of the law— especially section 610 —
that we have been hearing about, only forbids corporate contributions
for the election of candidates to office. I think that one must confront
fairly, squarely, the question of whether we want to concern ourselves
with the overall use of corporate corporation resources for purposes of
political persuasion.
By the way, when I say "corporation," you can add the phrase and
union" at any time. That is when we are talking about support for
particular legislation.
I will give a specific example here, although it took place on the
State level. One company, in a State where there was a right-to- work
law up for statewide referendum last year, spent $30,000 of company
money — and a great deal more when you add in the time of man-
agerial personnel — to distribute petitions, to put out advertisements,
and to exhort the voters of that State to vote in favor of tlie right -to-
work referendum. The company took the "official" position tliat they
were in favor of the right-to-work referendum. It thereupon usexi
its resources.
I might say here, also, that there is a move in a number of cor-
poration circles to work for the repeal of the statute that Dr. Petro
was talking about — the one whicli now prevents corporations from
spending money on candidates. There will be a paper given at the
American Bar Association in Miami Beach next week in wliicli it will
be seriously suggested that corporations should be allowed to spend
their money on the campaigns of candidates.
The Chairmax. That will apply, I assmne, to labor organizations,
too?
19904 IMPROPER ACTIVITIES IN THE LABOR FIELD i
Mr. Hacker. That is riglit. '
It S^^^^^i ^^^ ^'^I^f "?'^ ,^P^^^ "^^^^y «" candidates? -
Mr. Hacker That is right. I thinJ^, also-and again I say this
with some hesitation because I can only speculate-that coraorations '
really do not fear opening both labor's and management's gates at ^
once because they know that their resources for spending money are
quite equal to those of labor unions. This rais^ somi interesting^
speculations abou' the future because even though corporations havl I
the money to spend on politics, they are very frequently timid about i
tills. They are afraid they will get a bad name if they are associated :
with political activity.
The Chairman. And so will the candidate, if he gets elected and1
large sums of money have been contributed to his campaign by a i
particular company or some companies. x & ^ i
Mr. Hacker. Then they will say he is a prisoner of theirs.
1 he Chairman. That he belongs to them, bought and paid for •
Mr. Hacker. For some reason, or other, corporations fear this crit- i
icism more than labor unions. In other words, labor unions are i
more willmg to spend their money. Corporations are trepidatious !
about this, I think, partly because they are worried about the con- '
sumer: the fellow who won't buy an electric toaster, who will not '
buy a product because of the political activity of the company which ^
makes It, whereas the union just does not care. i
I might say, personally, that I Avas {usked down to TVliite Sulphur '
Springs about a month and a half ago to speak to representatives ^
trom 40 corporations. All of these men were charged with th& re- '
sponsibihty for corporate giving— that is, in their individual cor-
porations—and they were, of course, interested in coroorate donations 'i
to charity, education, and so on. ]
What tliey Avanted me to talk about was: Should corporations be- .
gin to make efforts to give money for political purposes? This is
the first time they had considered this. The meetmg was under the ]
auspices of the National Industrial Conference Board. I can simply I
say as a kind of forewarning here that I think thei-e will be a great ^
deal more talk m corporate circles about getting into politics. I '
think this raises a number of questions wliich I hope my academic i
approach does not render too abstract.
i!^.i^^"nn J'^^ question we really must face up to in the second half ■
ot the 20th century is, quite simply. What is a corporation? You ,
know, we tend to pair off— you did it yourself, Mr. Chairman, at the i
beginning of this hearing— corporations and trade unions. i
1 would deny that a corporation is a "voluntary association" in '
any real sense. In fact, I really do not know what a corporation is. '
1 know It has shareholders, but I tend to tliink most stockholders are ^
really m the position of being bondholders— indeed, they are rather '
like the holders of Government bonds. They are le^al "owners" of a \
corporation but they do not and cannot take much interest in its '
management.
The Chairman. Why do you say they are not voluntary ? ^
Mr. Hacker. I am talking, I liope," in a realistic sense— certain Iv '
not m a legal sense.
The Chairman. I am not challenging it. I have always thouo-ht i
if a few people go out and set up a corporation, they do it voluntanly,' i
IMPROPER ACTIVITIES IN THE LABOR FIELD 19905
that there is nothing compulsory about it. If I want to buy stock,
I buy it from the board or somebody coming around and selling stock.
I do it voluntarily. I may have been persuaded, but not coerced.
Mr. Hacker. With all due deference, I made a study of stock-
holder activity in the 100 largest corporations in this country. Now,
I am speaking as a professor. Please forgive me if I get too abstract.
The Chairman. I just want to get enlightened.
Mr. Hacker. I tliink we tend to take many of the old attributes of
the small corporation — such as the idea tliat the five of us here might
got together and set up a limited liability company— and transfer
these ideas to our large national corporations, without thinking too
dee[)ly about wluit happens when we make such a transition.
In other words, in the case of the large corporation today, I daresay
tliat many of them could dispense with their shareholders if they had
to because two-thirds of their capital comes from internal undis-
tributed dividends.
The Chairman. Comes from what ?
Mr. Hacker. From undistributed profits of their own. In oil com-
panies, for example, when they need money for capital expansion, they
raise it themselves out of their own earnings. This is a development
which seems on the increase. The corporation legally is the possession
of the stockholders. But, actually, it is becoming more and more of
an independent body, independent of the shareholders.
I realize I may be projecting mto the future, but I think this is
rather important.
The Chairman. Even if it is independent, how does that make it
involuntary ?
Mr. Hacker. Let us put it this way, that it is certainly "voluntary"
but it is not an "association" — that we cannot say that a group of free
citizens came together to set up a corporation the way in which the
five of us might do it in our hometown. Rather, what we see in the
case of the large corporation is an established institution — let us
say, General Motors. It is there and you can buy into it if you want
to, in a voluntary way. But I am not prepared to say that you and
almost a million other shareholders came together and set General
Motors up in a purposeful wa3^
(At this point. Senator Church entered the hearing room.)
Mr. Hacker. I am simply raising a rather practical question;
simply the question of "What is a corporation?" I am mystified
about it and, really, gentlemen, I am. asking that you be mystified
along with me. I think we get too msinj easy ansv/ers by transfer-
ring our ideas about the small company into the realm of the large
corporation.
The reason I raise this is because when corporations decide to use
their funds politically, one has to ask a question of "Who is 'repre-
sented' here?" In other words, when a company in one State spends
$30,000 for the passage of a law, one has to ask : Are employees being
represented here ? No, we cannot safely say this. Are shareholders
being represented ? There is no indication that they are.
In eEect, I am saying that the same questions that we asked about
unions — that is, the representative character of union political activ-
ity with relation to the members — have to be asked about coipora-
tions.
19906 IMPROPER ACTIVITIES IN THE LABOR FIELD
As far as the political "policies" of corporations go, they are made .
by top management. "VVe do not expect that they conduct a ballot
among employees ; we do not expect they ballot among shareholders.
I do not think that we should expect that top management take such
a ballot. But this, then, raisas rather curious questions about the
political status of a corporation. For example, does a corporation
rave a "right" to free speech? Well, following from all that I have
said up to this point I doubt if it does. If it is a voluntary association
in the way that tlie American Legion is, then it has a "right" to free
speech. But if it is not an association, but rather an on-going insti-
tution which is actually independent of the individuals who are af-
fected by its policies, then can we endow a corporation with "rights" ?
It is a "person" under the 14th amendment, but for political purposes
it is not a citizen.
I am rather dubious of the claims that corporations have "rights"
in the way that other associations do. I am, perhaps, asking you to
resolve my doubts here. I think this is a question that we are going
to face more and more as we discover that the men who manage cor-
porations act with a great deal of freedom. When the president of a
company says, "Our stand on this bill will be such and such," there
is no person or group in the internal structure of the corporation who
can actually contradict or oppose him on this. A top executive has a
great deal in the way of corporate resources to spend politically — on
lobbying and on various approaches to legislation.
I think that is all, Mr. Chairman, that I wanted to say here. In a
practical sense I am afraid that what I say will have severe limita-
tions ; but I do believe that in the years to come we are going to be
faced with these questions more and more.
Perhaps if we settle our thinking on them as early as possible —
and center on the definition of a large corporation — then we will:
be better able to legislate.
The Chairman. Let me see. The corporation finally becomes one
man, virtually ; that is what you say.
Mr. Hacker, A small group of men. Maybe three or four or six
or eight, yes.
The Chairman. And they can determine whether they will spend
corporate money for political purposes or not spend it for political
purposes ?
Mr. Hacker. That is riglit.
The Chairman, Therefore, if they determine to spend it for polit-
ical purposes, the stockholders possibly are defenseless ; they have no
voice, they do not have to be consulted in the first place; and in the
second place, they could not do anything about it anyway — there
is so much money power in the hands of the few that they control
the majority of the stock and, therefore, can do about as they please.
Mr. Hacker. That is right. And I do not think the stockholders
care. In other words, I do not think they would want to object.
The Chairman. The stockholder is concerned not about what the
president of the company does as far as politics; all he wants is his
dividends — to do well financially and get his dividends. Politically,
he will do his own out at the polls, on political hustling; but he wants
that corporation to operate to make money.
Mr. Hacker. That is right, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19907
Senator Church. This is the point that I intended to make earlier
this afternoon, with the need to retain in our Federal law some
restrictions with respect to both corporations and unions as to their
contributions of corporate or dues money to Federal election cam-
paio:ns.
Would you agree with Dr. Petro that we ought to simply strike
from the Federal statute books any prohibition against corporate
contributions to political campaigns or union contributions to polit-
ical campaigns? I am talking now^ about the use of dues money or
the use of corporate money.
Mr. Hacker. Before you came in, Senator Church, what I was
saying was that it is my belief that you will not find many corpo-
rations desiring to spend their money on the political campaigns
of Congressmen and other elective offices.
This is not the way they will spend their money. But I think
they will be spending their money more and more on persuading the
public to favor or oppose certain policies, issues, and so forth. In
this case, you then raise some questions about the "right" of freedom
of speech of a corporation.
I am waiting for the courts to decide on this. I would disagree
with Dr. Petro when he says that the courts will say that corporations
have the "right" of freedom of speech. In other words, even though
under section 610 corporations and unions are coupled together, I
conclude that the courts obviously have said that unions have free
speech.
I think the courts are going to stub their toe a bit when they come
to a corporation. I am not sure that they will decide that a corpora-
tion can spend its money politically even though a union can. I refuse
to anticipate the courts on this. But I certainly would say that thie
legislation in section 610 should stand. I certainly do not think it
should be repealed.
Senator Ervin. You suggest that while the corporation is a person,
as we used to say in the old days, without a soul, that you think it might
be without certain rights, too ?
Mr. Hacker. Yes, sir.
The Chairman. It cai
Mr. Hacker. No ; it cannot.
The Chairman. That is one right it is without.
Senator Ervin. As a matter of fact, the corporations have spent
considerable amounts of money for political purposes, that is, in
lobbying, hiring lobbyists to present their views to legislative bodies.
I live in a small town which has a number of industries, and I notice
an increasing tendency there among corporate executives not only of a
political nature but all matters. There seems to be a resurgence of a
feeling that they have civic obligations which they must discharge,
which I think is a very healthy thing.
The Chairman. Thank you very much. Dr. Hacker. We do appre-
ciate your coming down.
Mr. Hacker. You certainly are welcome.
Senator Church. Thank you, Doctor.
The Chairman. The next witness is Dr. Alexander.
Please be sworn.
19908 IMPROPER ACTIVITIES IN THE LABOR FIELD
You do solemnly swear tliat the evidence you shall give before this
Senate select committee shall be the truth, the whole truth, and nothing
but the truth, so help you God ?
Dr. Alexander. I do.
TESTIMONY OF HERBERT ALEXANDER
The Chairman. Doctor, give us just a little of your background,
your name, your position, and so forth.
Dr. Alexander. I am presently director of Citizens' Kesearcli
Foundation, which has been in existence about a year, dedicated to the
study of money in politics. Previous to that 1 taught in the depart-
ment of politics at Princeton University. Previous to that I had been
associated with Dr. Heard in his national survey on money in politics.
The Chairman. Thank you. Do you have a prepared statement ?
Dr. Alexander. Yes, sir.
The Chairman. Do you wish to read it ?
Dr. Alexander. If you would permit me ; yes.
The Chairman. You may read it and then comment as you go along.
Senator Church, will you act as chairman for a few minutes? I
have to go to the floor. I will be back as soon as possible.
(At this point. Senator McClellan Avithdrew from the hearing
room.)
Dr. Alexander. The views I express are my own and do not reflect
m any way those of the Citizens' Kesearch Foundation.
I think there are two goals to consider while discussing political
activities and political spending by both labor and management.
These are :
1. That political participation by individuals, whether union mem-
bers or businessmen, is desirable and we should seek to encourage it in
ways consonant with political realities.
2. That comprehensive public disclosure of union and corporate
practices is essential as a preventive or deterrent to abuses, and as a
means of informing the public.
The political realities as I see them are that corporations, business
or trade associations, and labor unions, are natural financial constitu-
encies and their leaders should not, and constitutionally cannot, be
debarred from asking stockholders or members to contribute individ-
ually to political condidates.
It is also unrealistic and perhaps unconstitutional to try to prevent
political appeals to other than members through disguised institu-
tional advertising, sponsored broadcasts, or other means. But it is
realistic and desirable as well, to try to prevent the political use of
corporate or union funds collected for other purposes.
My reasoning follows :
Great changes are occurring in our political practices. For example,
both parties are attempting mass solicitations to get more contributors
to help foot the political bills. The parties have been aided in these
efforts b^ the joint "give a buck" campaign of the American Heritage
Foundation and the Advertising Council. This trend toward mass
f undraising is desirable, but political money in small sums is hard to
come by and to be successfully raised requires well-organized efforts in
the recruitment and dispersal of solicitors for person-to-person con-
frontation, which is the most successful f undraising method.
IMPROPER ACTIVITIES IN THE LABOR FIELD 19909
Tlius far, tlie national parties have failed to receive the full co-
operation of many State and local party committees necessary in or-
ganizing widespread solicitations. That cooperation will not be
forthcoming on a large scale until political leaders recognize the desir-
ability of spreading the financial base and can come to rely upon small
contributions for their campaign funds.
This will take many years to achieve and meanwhile, corporations
and unions exist in natural financial constituencies, wherein there are
readymade channels for soliciting votes, political money, and volun-
teers for political service, in short for mobilizing the efforts and
energy of large numbers of persons.
In a sense, these institutional constituencies may be replacing — or
competing with — tlie ward and precinct as the center for mobilizing
political energy.
The labor unions have had 15 to 20 years of experience in such
mobilization among its members and at the highest coiporate levels,
activity in fundraising and recruitment of volunteers is long estab-
lished. By 1958 corporate managers were reaching into the middle,
junior, and lower executive and technical levels activating a high po-
tential for political work,
I see no immediate dangers in these activities as presently prac-
ticed, though I would prefer the party organizations to exercise their
rightful functions. Ultimately the trend could be dangerous if eco-
nomic institutions were to replace party structures.
Barring a rationalized party structure, we must recognize that cor-
porations are more than profitmaking organizations, and unions are
more than adding machines for increased wages. Both are essential
parts of our social and political fabric ; both have, we hope, sensitive
social consciences.
Since Government regulation impinges at so many points upon both
corporations and unions, their leadere must be sensitive to their broad
political interests, to Government policies that will help or hinder
them. Both will at times try to mobilize by persuasion and propa-
ganda, latent political inclinations amongst members. Both will try
to activate members to vote, to contribute money, to give political serv-
ice. And both will at times try to influence nonmembers, or the public
at large, in political campaigns or propaganda — or more politely
"educational" — campaigns, to achieve an atmosphere congenial to
their ideas.
I see no reason at present to restrict such activities. If it is union
or corporate membership that gives one a political interest, then let's
recognize and accept his participation in defense of his interests as
he sees them. Legislatively, I think we should try to guide, to
channel in proper directions, to publicize such activities, but not to
restrict them.
For example, we should encourage democracy in labor unions, in
the means by which political endorsements are made, and I favor any
legislation that promotes such democratic internal processes. We
should try to protect the right of dissent in unions and prevent com-
pulsory assessments or compulsion of individuals to engage in polit-
ical activities against their wishes. The individual member's re-
ponse often is not the result of coercion, as some would have us believe,
but of social pressure or the need to conform or the urge to succeed. In
19910 IMPROPER ACTIVITIES IN THE LABOR FIELD ■
many cases of cross-conflict between one's own viewpoint and that ^
taken by the organization, the result may be apathy — also something ]
to be deplored. ^
But to expect a two-party system within unions, or to expect union j
organizations not to endorse candidates or take positions on issues, j
is unrealistic. Thus voluntary methods are desirable, and should I
be favorably publicized. But union funds collected for other pur- ?
poses should not be used politically. '
The line between a registration drive or a citizenship or educational^
drive, and activities that may directly aid one party or candidate ■
more than another, is legislatively difficult to draw. The best safe- .
guard I know is to require detailed disclosure of union funds and \
then to publicize those activities which are partisan or of direct aid ',
to a party or candidate. -
Senator Church. May I interrupt there ? .j
Dr. Alexander. Yes, sir. \
Senator Church. I take it from your testimony up to this point ;
that you first recognize the legitimate right of unions or of business ^
enterprises to participate in politics, to endorse and support candi- ]
dates of their own choosing because this is the very process of self- I
government. ]
But that unions for this purpose should use voluntary f mids and l
businesses for this purpose should use voluntary as distinct from i
corporate funds ? i
Dr. Alexander. Yes, sir. ■
Senator Church. And that where unions do, in fact, employ dues '[
money for registration drives, for citizenship training, for editorial- :
izing of one kind or another, or for educational purposes, whatever it ■
may be, that here it is extremely difficult to prohibit and restrict legis- ■
latively and to establish penalties, that the best device for regulating '\
that kind of function is through enforced disclosures and then bring- i
ing publicity to bear upon the kind of activity that these disclosures ;
reveal. 1
Dr. Alexander. Precisely. ^
By the same token, try as we may, I doubt that we can curb institu- j
tional advertising or other corporate practices that may directly or :
indirectly aid a party or candidate.
(At this point. Senator McClellan reentered the hearing room.)
Dr. Alexander. The line between education and propaganda is
rarely clear. If you are for it, it is education ; if you are against it, it
is propaganda. The need, again, is for disclosure, publicly, and ;
long-term reeducation. \
The need is for greater enforcement of existing statutes and rules, i
by the Internal Kevenue Service and the Department of Justice.
The need is to chaimelize disguised yet blatant political appeals to
better purposes, to nonpartisan efforts like those of the American
Heritage Foundation. The need is to commend such efforts as the
aerojet program, which was thoroughly nonpartisan and impartial,
and to point out their advantages over those corporate efforts which
are more partisan than not, and then to encourage imitation of the
former.
In both cases, I think that exposure resulting from congressional
hearings, investigations, and reports is essential. The work of this
IMPROPER ACTIVITIES IN THE LABOR FIELD 19911
present select committee is one example. The work of the earlier
Senate Special Committee to Investigate Political Actnaties, Lobby-
ino-, and Campaign Contributions, headed by the chan-man of the
present committee, is another.
The work of the so-called Gore committee m 1956-57 is still an-
other. In this latter connection, I would urge more investigatory
and disclosure activity by the Senate Subcommittee on Privileges and
Elections, on a pei-manent basis with special emphasis upon campaign
years. And at the same time I would urge improved disclosure and
publicity provisions for all political campaigns.
One other brief point. I believe the use of large smns of money m
political campaigns is so easily dramatized that it leads us to forget or
minimize the tremendous number of corporate and union man-hours,
paid or unpaid, volmitary or captive, that go into political activities.
The bookkeeping of man-hours may be difficult, especially if we try to
translate their worth into dollars and cents, but I think that someone
ought to look into the possibilities of such accounting for time and
services. Only then will we Imow the time cost of political campaigns
and the extent of labor and management spending.
Senator Church. That completes your prepared statement. Have
you anything else you would like to add in light of the testimony that
has been given here to the committee this afternoon ?
Dr. Alexander. I would like to, with your permission, make one
distinction in regard to the corporate programs that have been under-
taken by various corporations in the country.
I quote here from pamphlet No. 8, "Businessmen in Politics," in the
"Action Course in Practical Politics," put out by the Chamber of Com-
merce of the United States in which they say on page 3 that-—
The General Electric Co. has spelled out the difference between nonpartisan
political activity to improve Government and business climate generally, and
partisan political activity in behalf of one party or specific candidates.
I think there has been a lot of loose talk in regard to the business-
men in politics. We are becoming rather accustomed to labor in
politics, but over the past year there has been an upsurge in emphasis
upon business in politics.
I think we fail to recognize in many cases two distinct kinds of of
activities. One is nonpartisan, generally, and attempts to create an
atmosphere that is congenial to the ideas of the corporation, ideas in
which the corporate officials believe that the corporation will prosper.
But on the other hand, there are the partisan political activities in
behalf of one party or specific candidates.
If you will permit me, I will give a very brief illustration of what
I mean. The Aerojet General Corp. in California conducted a good
citizenship campaign in the 1958 elections. This was thoroughly im-
partial and objective. It collected funds for both Kepublicans and
Democrats among the management and from among the general
employees.
Upward of $25,000 was collected for the two parties in California.
The registration drive that was also carried on by the corporation
netted 2,000 new voters in the 1958 election. This is one type of non-
partisan political activity on the part of a corporation. Compare
this with the program of the Gulf Oil Corp., whose plan was to
analyze the records of Members of Congress by, one, their attendance
19912 IMPROPER ACTIVITIES IN THE LABOR FIELD
at important sessions; two, their vote on significant measures; and,
three, their attitudes as revealed by speeches and committee activity.
Archie D. Gray, senior vice president, said that the company isJi
studying everything, "that may help an individual shareholder, em-,
ployee or dealer, determine whether his Senators and Congressmen i
are serving him well, little or not at all." i
It seems to me that there is quite a distinction between the kindsi
of programs promoted by the American Heritage Foundation, "Con--
tribute to the Party of your Choice," "Register in the Party of your?
Choice," generally emphasizing increased citizen participation, asi
opposed to the general kind of endorsements of candidates bv cor-
porations, going over the voting records and trying to determine!
whether the voting behavior of the Senators and Representatives hasi
been favorable to business.
The same thing applies to labor. I do not believe that it is possible
to prevent endorsements of political candidates by labor. By the i
same token, I believe that every time an endorsement is given, a candi- '
date has the right to accept it or reject it. I do not find very many
rejections of labor's support. j
I think part of this is attributable to the fact that many politicians, '
candidates, must be dependent upon labor money. It is because of !
this that in my statement I brought in the problems of fund raising, ,
and broadening the political base. i
I think this is crucial to our democratic system. I think that if we
can bring in large sums of money in small sums, that we will decrease
the reliance of candidates upon labor money, or upon any kind of
tainted money, any money that is given with any strings attached.
I do not believe it a general condition of our political life— that j
money is always given with strings attached— but I believe that if the
political system leaves the candidate in such a position that he may
have to rely largely on labor money or on money from corporations, j
or money from executives of corprations, then there is this chance I
that he will become beholden to them. i
That is also the reason why I emphasize the importance of the j
National, State, and local parties engaging in kinds of activities which !
will attract citizens so that we do not have to depend upon the natural i
constituencies which exist where there are large aggregates of people in I
corporations and in labor unions, in order to mobilize political energy. '
Senator Church. Somebody has observed that this country has
become a country of big government and small parties. I think that
is so. Do you have any specific recommendations to make with respect
to how party organizations could more effectively collect money on \
behalf of their nominees in political campai^is in such a way as not ;
to leave these men overly beholden to any particular groups ?
Dr. Alexander. I beJieve this is largely a matter of education over
a period of time. The national parties have supported the American
Heritage Foundation campaign, "Give a Buck to the Candidate of
Your Choice." 1
I believe when you get down to tlie Sttite ami local level, and in the \
last analysis it is at the local level where solicitation must take place '
on a door-to-door basis, a neighbor-to-neighbor basis, in personal con- i
frontation, that it is the job of the national parties to attempt to i
achieve that kind of cooperation on the part of local leaders where 3
I
IMPROPER ACTIVITIES IN THE LABOR FIELD 19913
they will be willing to mobilize groups of solicitors to go out, raise
money, and bring it in in small sums.
But I know that that cannot be done overnight, no matter how good
the intentions of the national committees are. We have a splintered
party system, partly reflecting federalism, and partly reflecting the
separation of powers, and it is very difficult for S^mator Morton or
Paul Butler — well, it is impossible for them to dictate to local party
leaders.
But we must admit that many local organizations are, in effect,
closed clubs ; they are not interested in bringing in young people. On
the other hand, there are some that are trying to interest new people
to participate in politics. It is a long-term proposition and I do not
know all the answers. I believe along with Professor Heard this
morning, that a tax credit for political contributions would have some
beneficial effect, not that the dollar or two that the individual realized
as a benefit would induce him to make the contribution, but rather, the
notion of a tax credit would give Government sanction to the act of
political giving.
I think that there is a long established tradition in this country, an
image of politics, that political money is dirty. I think it is important
that this Government sanction be given, that the Government encour-
age the act of giving, to create an atmosphere again, in w^hich the
Congress of the United States, the President in signing the bill, indi-
cate that they are in favor of giving.
I think the tax credit is very important for that reason. But I
think in many respects it will not bring in large sums unless the politi-
cal parties are willing to organize their solicitation drives. It is much
easier to rely on 10 or 15 large contributors in any political organi-
zation than to mobilize contributions from 10,000 or 15,000 people.
The Chairman. Is there anything further ?
Senator Ervin. The only thing is I was very much impressed with
your observation about the amount of man-houi^s put into political
efforts and the difficulty of computing them or their value. I have
always been interested in that. I live in a county in North Carolina
in the foothills of the Blue Eidge Mountains, about half Republican
and half Democratic. In my younger days I always found that in
putting forth tremendous political activities you got along better
without any money. I know I used to get all the precinct registra-
tion books copied. I would go in to each precinct and get people who
were interested in politics and get them to get other people who were
interested, and go to meetings and decide how many were Democrats,
and make arrangements for somebody to see that every Democrat
got to the polls.
I found out that if you had a man that worked because his heart
was in it he was worth a whole lot more than a man you paid to work.
I even appointed somebody to see that I voted for certain on election
day. That is the type of politics which takes a tremendous amount of
time and a tremendous amount of energy, but I found that where a
man's heart is, he is more likely to do something and you can get it
done without money.
Dr. Alexander. Senator Ervin, in that regard, I would say that
we should look at our corrupt practices legislation which puts the
emphasis upon money, not upon service. This is the tipoff to the
19914 IMPROPER ACTIVITIES IN THE LABOR FIELD ^
attitude that the Congress has taken over the years toward political
participation. This may have a bad effect because we put so much
emphasis upon tlie accounting for money, whereas money in itself ia|
neutral and has to be spent to buy service or to buy goods.
By the same token, service, which is given voluntarily, has aj
monetary value. So I think you have to look at both money anal
service. In effect, money is just a kind of service. In some ways it isj
a substitute for other kinds of participation. j
For many people, it is easier to give a few dollars than to devote a^
few hours. i
The Chairman. Thank you very much. Dr. Alexander. ;
Senator Church. We appreciate your coming very much.
Senator Ervin. We certainly do. You have presented very mter-i
esting thoughts and concepts.
The Chairman. Thank you. Doctor. ";
Dr. Alexander. Thank you. -, , ^ . , . ,
The Chairman. Have we any other witnesses scheduled tor this^
particular hearing ?
Mr. Adlerman. No, Mr. Chairman.
The Chairman. The committee will stand in recess subject to callj
(Whereupon, at 5 :20 p.m., the hearing in the above-entitled mattei^
wasrecessed, subject to call of the Chair.) ^ -.^
(Members of the select committee present at the takmg ot th«j
recess : Senators McClellan, Church, and Ervin.)
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